2. AIRLINES
COST REDUCTION STRATERGIES
Assigned by : Nikita Ma’am
Presented By : Diljit Singh Khalsa
Ronak Gosai
Avni Patel
Rajan Amin
Presentation on :

3. General Overview
Founded : 2006
Commencement of Operations : 8 April 2006
Type: LCC (Low Cost Carrier)
Hubs : Indira Gandhi International Airport (Delhi)
Fleet Size : 101
Destinations : 39
Parent Company : InterGlobe Enterprise
Net Income : INR 1,304 Crores (FY 2014-15)

4. WHY ?
 In Jan 2013, IndiGo was the second fastest growing low cost carrier in Asia.
 In August 2103, the Centre for Asia Pacific Aviation ranked IndiGo among the 10 biggest low
cost carriers in the world.
 Largest airline in India in terms of market share of 36.5% as of September 2015.
 Order of 250 Airbus A320neo in August 2015 is the single biggest order by an airplane from
India worth approximately $27 billion.
 IndiGo is only 1 of two airlines in India who declared profits in FY 2014-15 in the struggling
Indian market.

6. Strategy 1 : SINGLE TYPE OF AIRCRAFT
 IndiGo operates only Airbus’s A320 family of aircrafts in its fleet.
(Air India 10, Jet Airways 9, Spice Jet 3)
 A320 are one of the most fuel efficient planes today.
Benefits:
Greater flexibility.
Low hiring cost.
Low training cost.
Streamline MRO process.
Low up gradation cost.

7. Strategy 2 : NO FRILLS
 IndiGo offers only Economy class with no in-flight entertainment or complementary meals.
Benefits:
Only economy class means more customer per flight.
No frills saves cost.
Do not have to spend time, money or crew on privilege customer.
No need to maintain expensive lounges at airports.

8. Strategy 3 : LOW AVERAGE FLEET AGE
 IndiGo’s average fleet age is approximately 4 years.
 Most airlines have an average of 10-15 years or more.
 IndiGo buy planes or lease planes for 5-6 years of duty and then return them or lease them
forward.
Benefits:
Planes are more fuel efficient when young.
Operating this way helps them avoid D-Check.
D-Check is done compulsorily after 8 years of operation of a plane.
A D-Check may take up to 2 months during which the aircraft remains out of service.

9. Strategy 4 : BULK BUYING & LEASING
 Experts believe that this type of operation alone adds $4 - $5 million per plane.