Indigo Airlines Case Analysis

INDIGO AIRLINES CASE ANALYSIS

LOW-COST CARRIER DIFFER FROM A FULL-SERVICE AIRLINE

Low cost carriers have distinctive features. Which are carriers that determine their way of doing business within a low cost frame. It is possible to list the low-cost carrier (LCC) differ from a full-service airline (FSA) as follows:

• ‘No frills’ product

• Point-to-point route systems as opposed to ‘hubs’

• No connections, interlining

• Simple fleet composition, typically one type of aircraft

• Non-unionized labour

• Charge for ‘ancillaries’

• Price sensitive travellers

• High density routes

• High aircraft utilization

• Use of secondary airports

• Higher density seating

• Single class

• No assigned seating (e.g., Southwest)

• ‘Cheap and cheerful’

• Minimum turn-around time

• Short to medium haul routes (up to 750 miles)

• Simpler baggage-handling system

• Simpler process provides adequate customer service

• Continuous schedule minimizes congestion, reducing fuel consumption

THE REASONS OF INDIGO'S QUICK PROFITABILITY

Indigo, India's New Delhi-based low-cost airline company, has become one of the most profitable airline in the industry very quickly. Indigo Airlines started its airline service on August 4 in 2006 and it was the latest entrant. However, Indigo was able to report profits within three years of its inception. By 2011, Indigo had the highest load factor, highest number of passengers carried, and was also second highest in terms of kilometers flown among all its competitors. Despite the huge losses of the Indian Civil Aviation industry, Indigo itself was the most profitable airline company in the industry. The reasons for the success of indigo or strategies of Indigo are given below:

Before explaining the reasons for the success of Indigo, it is necessary to take a look at the Indian aviation industry of that period. LCCs were different in developing countries like India. The Indian airline industry was consistently at a disadvantage compared to the international airline industry, especially from the context of the LCCs. LCCs had different types of fleets, secondary airports were