IndiGo Airlines – A Case study in International Business Strategy The right thing to do is also the smart thing to do
The success of Indigo is a mix of a clear brand promise of "on time" and supported with slick branding and signage, smart technology support and a passionate and young work force who multi-task.
IndiGo is India's largest airline with a market share of 29.5 per cent as of June,2013 as well as the country's largest low fare carrier. IndiGo is the fastest growing low cost carrier in the world (source: CAPA). IndiGo has a simple philosophy: offer fares that are always low, flights that are on time, and a courteous, hassle-free travel experience. IndiGo’s On Time Performance is one of the best in India. IndiGo’s Technical Dispatch Reliability is 99.91% making it the airline with the least number of cancellations in India. With its fleet of 66 new Airbus A320 aircraft, the airline offers 422 daily flights connecting 33 destinations - Agartala, Ahmedabad, Bangkok, Bengaluru, Bhubaneswar,Coimbatore, Chennai, Delhi, Dibrugarh, Dubai, Goa, Guwahati, Hyderabad, Imphal,Indore, Jaipur, Jammu, Kathmandu, Kochi, Kolkata, Lucknow, Mumbai, Muscat,Nagpur, Patna, Pune, Raipur, Singapore, Srinagar, Trivandrum, Vadodara,Vishakhapatnam, and Chandigarh. HISTORY
ndiGo was set up in early 2006 by Rakesh S Gangwal, a USA-based NRI and Rahul Bhatia of InterGlobe Enterprises. InterGlobe holds 51.12% stake in IndiGo and 48% is held by Gangwal's Virginia-based company Caelum Investments. IndiGo placed a firm order of 100 Airbus A320-200 aircraft during June 2005 in plans to commence operations in mid-2006. IndiGo took delivery of its first Airbus A320-200 aircraft on 28 July 2006, nearly one year after placing the order, and commenced operations on 4 August 2006 with a service from New Delhi to Imphal via Guwahati. By the end of 2006, the airline had six aircraft. Nine more aircraft were acquired in 2007 taking the total to 15. By December 2010, IndiGo replaced the state run flag carrier Air India as the top third airline in India. It already had a 17.3% of the market share, behind Kingfisher Airlines and Jet Airways. By early 2012, IndiGo had taken the delivery of its 50th aircraft in less than 6 years. IndiGo is known to have placed the largest order in commercial aviation history during 2011 at that time, when Airbus won the US$15 billion deal for 180 aircraft. This deal pushed up the percentage of Airbus aircraft in India to 73%. By February 2012, IndiGo was expanding rapidly and was making solid profits, the only airline in India to do so. It had replaced Kingfisher as the second largest airline in India in terms of market share. IndiGo's strong adherence to a low-cost model, buying only one type of aircraft and keeping operational costs as low as possible along with an emphasis on punctuality are said to be some of the reasons for its success even when the airline industry in India is going through a bad patch. IndiGo focuses on adding a new plane every six weeks and sometimes even faster. However, this rapid expansion led to a scathing report by the DGCA in December 2011, which highlighted problems resulting from this expansion in the airline that could impact safety. On 17 August 2012, IndiGo became the largest airline in India in terms of market share (27%), which is more than one-fourth of total market share of all the Indian airlines combined, in the process dethroning the full-service carrier Jet Airways, which had held that position for many years. The airline had reached the position just six years after operations commenced. In January 2013, the Centre for Asia Pacific Aviation announced with, along with Indonesian airline Lion Air, IndiGo was the second fastest growing low-cost carrier in the continent. In the same month, IndiGo became India's first airline to take the delivery of the Airbus A320-200 aircraft equipped with sharklets. Aditya Ghosh, IndiGo's president...
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