"IndiGo is a very quality conscious
airline and passenger safety is
paramount to our company’s mission
and values," the Gurgaon-based airline
said in a statement.
"IndiGo is in line with the ‘strategic
plan of the ministry of civil aviation
(MOCA) for 2010-15’, which
recognizes the need for growth."
IndiGo to go ahead with fleet expansion
"We will be adding 12 aircraft in the current year. We
had a fleet of 48 aircraft in December 2011 and this
number will reach 60 aircraft in December 2012,"
Aditya Ghosh, president
IndiGo is the only profit making airline in the country,
with a market share of 19.8 percent in November, 2011.
15. External Analysis
Airline Industry Attractiveness
Foreign equity allowed:
Attraction of foreign shores:
Rising income levels and demographic profile:
Untapped potential of India's tourism:
Glamour of the airlines:
19. Bargaining Power of Suppliers
IndiGo fleet comprise of Airbus-A320 and the switching
cost is high due to the limited number of suppliers.
The brand value of suppliers is high due to their less
number and results in higher bargaining power for them.
The proof of evidence for high power enjoyed by ATF
suppliers lies in the fact that the ATF prices constitute 35-
40% of the costs in India compared to 20-25% globally.
20. Bargaining Power of buyers
Buyers in airlines industry are large in number and highly
fragmented thus lowering their power .With the growing
Indian economy and increasing low cost carriers, the buyers
have increased and so have the growth opportunities.
The switching cost is minimal since there are multiple
alternatives available. It is not difficult to move from one
airline to another or to switch to a substitute.
21. Competitive Rivalry
Very little scope for differentiation between
competitors’ products and services
Suppliers of aircrafts are the same, i.e., Boeing and
Airbus. Hence supplier’s bargaining power is high.
Switching cost of customers is high for low cost
carriers, i.e., there is no brand loyalty. Closest
competitor of IndiGo is Spice Jet followed by Go Air
22. Availability of Substitutes
The substitute for low cost airline company is the railways.
But this substitute is not very powerful due to the following
reasons: Customers use airline transport as it is convenient
and saves travelling time. So trains cannot work as a
substitute to save time.
Secondly, many customers use airlines as a status symbol.
So again, trains cannot substitute for prestige. So if we
consider IndiGo airlines, the direct substitutes are the other
low cost carrier’s like Spice Jet and Go Air. So in this case,
threat of substitutes is high as the switching cost between
low cost carriers is low.
The flight density of IndiGo airlines is limited in domestic
market; hence there is a big scope to increase the flight
Opening up of international routes
Largest market share among LCCs in Indian Market
Middle class taking to the skies
ATF (Air Turbine Fuel) prices have increased radically
Foreign and private players often poach work-force of
Barriers to exit in aviation industry are high because of
high capital investment, nongovernment restrictions and
loss of brand image.
27. Advertisement Strategy
Hoarding at airports.
Social networking medium- Facebook, Twitter, YouTube.
Multi- storeyed building and offices.
Sponsoring fashion shows, talent hunts, new year parties
IndiGo has high brand awareness and brand equity.
Cost leadership: Successful implementation of low cost
Highly efficient management that ensures high rate of on-
Continuous innovation to improve on non-price factors.
Tie-up with hotels
Scope of product differentiation is less.
IndiGo is not exploring the untapped domestic air cargo
Not on too many routes as compared to competitors
Still has to establish itself on international destinations