Neil Majumder - Aviation Industry - IndiGo Airlines
Neil Majumder - Aviation Industry - IndiGo Airlines
Neil Majumder - Aviation Industry - IndiGo Airlines
(Aviation Industry)
SECTION: B
GROUP NUMBER: 10
Neil Majumder
20PGP131
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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Table of Contents
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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INDUSTRY CATEGORY DETAILS
S.no Airlines
1) InterGlobe Enterprises Ltd (Indigo)
2) SpiceJet Ltd
3) Go Airlines (India) Ltd
4) Air Asia Ltd
5) Jet Airways India Ltd
Low cost airlines provide comparatively lesser facilities than traditional Airlines. Like
traditional airlines LCC do not provide any inflight entertainment, complementary toys,
newspapers, magazines etc. LCC also charge for any extra comfort given for passengers
like food, water, pillow, blanket, carry-on baggage etc. LCC's do not have the option for
passengers to reserve a particular seat of their choice prior to boarding. passengers will
not get refund or transfer to later flight if he/she missed the flight. Early reservations in
LCC's reward the passengers with the lowest fares, fares will increase as the seats fills up.
Sometimes traditional carriers may offer more cheaper fares than low cost airlines as
promotional activity. Low cost airlines are intended to offer low fares by reducing their
operational cost and this not intended for promotions.
S.no Airlines
1) Air India Ltd
2) Tata SIA Airlines Ltd (Vistara)
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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3) Charter
A charter flight is an unscheduled flight that is not part of a regular airline routing. With a
charter flight, you rent the entire aircraft and can determine departure/arrival locations
and times.
S.no Airlines
1) STIC Travel Group
2) Taj Air
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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INDUSTRY ANALYSIS
Introduction
The civil aviation industry in India has emerged as one of the fastest growing industries in the
country during the last three years. India has become the third largest domestic aviation market
in the world and is expected to overtake UK to become the third largest air passenger* market by
2024.
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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Online bookings rising, with both OTAs and direct sales seeing growth
Online bookings are expected to see robust growth during the forecast period, with online
travel agencies (OTAs) set to remain the primary channel for booking flights online. The
majority of flights were booked online at the end of the review period, with OTAs
responsible for more than 60% of online bookings. However, most of the airlines in India
are developing their own websites and mobile apps in order to reduce the commissions they
pay to intermediaries. They are also employing loyalty programs, such as Jet Privilege by
Jet Airways, and IndiGo Airlines’ student discount program, to encourage consumers to use
their platforms rather than booking through intermediaries.
Volatile international crude oil prices represent a threat to the operating costs of the leading
players in the highly competitive Indian airline industry. Companies will need to look for
ways to improve operational efficiency, minimize costs and increase revenues in an
intensely competitive environment, which continues to be dominated by domestic players,
both in scheduled and low cost carriers. IndiGo and national flag carrier, Air India, are the
leading airlines. Competition is particularly intense amongst the low-cost carriers, which are
most active in domestic travel.
Market Size
India’s passenger traffic stood at 341.05 million in FY20. It grew at a compound annual growth
rate (CAGR) of 11.13 per cent during FY16-FY20. Domestic passenger traffic stood at 274.50
million in FY20, growing at a CAGR of 12.91 per cent over FY16. International passenger
traffic stood at 66.54 million, growing at a CAGR of 5.01 per cent during FY16-FY20.
Aircraft movement grew at a CAGR of 9.56 per cent from 1.60 million in FY16 to 2.59 million
in FY20. During FY16-FY20, domestic aircraft movement increased at a CAGR of 9.83 per cent
and international aircraft movement expanded at a CAGR of 3.57 per cent. India’s domestic and
international aircraft movements grew to reach 2,155 thousand and 433 thousand during FY20,
respectively.
To cater to the rising air traffic, the Government of India has been working towards increasing
the number of airports. As of March 2019, India had 103 operational airports. India has
envisaged increasing the number of operational airports to 190-200 by FY40.
Further, the rising demand in the sector has pushed the number of airplanes operating in the
sector. The number of airplanes is expected to reach 1,100 planes by 2027.
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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Achievements
Following are achievements of the Government:
Under RCS-Udan scheme, approximately 34,74,000 passengers were flown and 335
routes were awarded during 2019, covering 33 airports (20 unserved, 3 underserved, 10
water aerodromes).
As on October 2019, 55 AAI airports were declared as Single-Use Plastic Free Airport
Terminals.
India was expected to have the largest number of aircraft flying by its scheduled airlines
latest by December 2019.
IndiGo Airlines
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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Indigo Airlines is one of the leading airline players in India. Indigo Airlines
provides low cost air transportation service to the consumers. This is their core
product in their marketing mix. They also provide supplementary services like web
check in, food on board etc. They have a variety of meal options for their
consumers. For consumer’s convenience and comfort Indigo Airlines also provides
online booking, mobile ticketing and pick and drop services.
Indigo’s Cargo services named CarGO is also catching up very fast. They take
very good care of the shipments. They have special packaging for fragile packages
which come under 6E priority. They do not accept perishable shipments like
seafood, dairy, plants, meat. Indigo Airlines also carries postal mails like speed
post, ordinary mail, and Army mail.
Indigo Airlines is India’s most efficient low-cost carrier operating flights to 87 (63
Domestic + 24 International) destinations which includes 6 international
destinations. Indigo Airlines is one of the business ventures of InterGlobe
Enterprises. It was started in August 2006 and in a decade, it has grown to have a
market share of 59.4 (as of May 2020). Indigo Airlines is India’s biggest
commercial airlines (by market share). Indian aviation industry is very competitive
and is struggling with competition from other modes of transport as well. Yet
Indigo Airlines is known for its low-cost fares, punctuality, and hassle-free
experience. Over the years it has become India’s most preferred airline due to its
low-cost fares and high quality. Indigo Airlines has 14 new generation A320neos
which forms a part of their 277 fleet. It carries around 4,035,677 passengers in a
month. The operations and management of Indigo Airlines is headed by Mr.
Aditya Ghosh who is the president and whole-time director of the company.
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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Aviation is among the worst-affected sectors amidst the Covid-19 crisis that has taken the scale
of a pandemic. According to the International Air Transport Association, airlines globally can
lose in passenger revenues of up to $113 billion due to this crisis.
Revenue loss
1. IATA said the COVID-19 crisis would see global airline passenger revenues drop by USD 314
billion this year.
2. Airlines in the Asia-Pacific region would record the largest revenue drop of USD 113 billion
in 2020 compared to last year.
3. the revenue impact for airlines operating to and from the Indian market would be USD 11.221
billion (over Rs 85,000 crore).
4. With prolonged travel restrictions in place around the world, one of the major challenges faced
by the aviation industry is a massive plunge in cash reserves as fleets remain grounded for almost
a month now. Many airlines in India are close to bankruptcy as their cash reserves are running
out amid the nationwide lockdown
5. IndiGo are losing about ₹75-90 crore daily during the shutdown.
6. Total losses of 3.3 to 3.6 billion dollars was incurred by the Indian aviation sector, including
airlines, airports, and ground handling industry during April- June 2020 quarter.
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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COMPETITOR ANALYSIS
The following data presented in the table below depicts the Market Share of the Airline Industry
with respect to Indian Market Domain highlighting InterGlobe Aviation Ltd. Having the
maximum share.
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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MARKET SHARE OF VARIOUS AIRLINES IN INDIAN MARKET
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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NUMBER OF PASSENGERS
From the data provided above the inference that can be drawn for IndiGo Airlines is that
considering it being a Market Leader in this segment and has a competitive price in the
market with an consistent and optimum On Time Performance throughout the years of
operations.
The Efficiency of performance and quality of service has paved the way for having more
customers with every successive year of operation.
In the steep competitive environment also IndiGo due to its unique USP of being On-
Time, being the Young Vibrant Airlines and presence everywhere across the country has
helped to have market dominance considering the fact that it started relatively young and
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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new with respect to the other airlines with bigger planes and international network
working for it as well.
Segmentation, Targeting and Positioning
Segmentation of IndiGo
The Target Segment Indigo is Going Ahead is with: 1. Price Sensitive Segement, 2. Reliability and Price Quality
The Target market of the Indigo Airlines are those customers who have the preconceived
notion that Airline Travels are very costly and consider Railway as their means of
Transport.
Indirect market figures for indigo airlines are approximately 60% of official travelers and
40% off includes all types of travelers in major cities of India, Delhi, Mumbai, Bangalore
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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and Chennai. Ignoring the fact that b-grade cities also have the potential to generate
profits.
Indigo airlines being an airlines company has to keep in mind the needs of the customers
need and perspective of good and economically viable customer needs which in turn
creates a long-term relationship with the customers. The psychographic for indigo airlines
are the people who travel through trains in first class and have an annual income of more
than 300,000 Indian rupees.
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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Aim to Create that Spot in Minds of Customer (Positioning)
In order to create a particular Image in the minds of the customer it is very important to take into
consideration of the Positioning of the company which differentiates itself from the other market
players in such a way that if a customer opts a service that is in regard of the Company’s
offerings, the Image of the Company’s Brand Must pop into customer’s Mind which can be
achieved by 2 Broad Methodologies;
Product Strategy (Amplifying the Product Characteristics and Attractiveness)
Promotional Strategy (Promoting Events to Target the Specific Market Segments)
IndiGo was able to pull this string to it’s very own advantage and was able to make an a firm
stand in the Market by acquiring and Retaining the Customers in all it’s year of service.
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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Porter’s 5 Forces Analysis of IndiGo Airlines
R&D:
R&D:Indigo
IndigoAirlines
Airlinesspends
spendsheavily
heavilyon
onthe
theresearch
researchand
anddevelopment
developmentactivities
activitiestotopreserve
preserveitsits
leadership
leadershipposition
positionininvarious
variousproduct
product segments
segments
Culture:
Culture:Indigo
IndigoAirlines
Airlineshas
hasaastrong
strongculture
cultureofofprocess
processand
andproduct
product innovation.
innovation. The
The
Company
Company organizational
organizationalculture
culturesupports
supports the
thevision,
vision,mission
missionand
andvalues.
values.
Scale
Scaleofofproduction:
production: Indigo
IndigoAirlines
Airlineshashasaalarge
largescale
scaleofofproduction,
production, which
whichenables
enablesthe
the
company
companytotoachieve
achievethethebenefits
benefitsofofeconomies
economiesofofscale.
scale.enhances
enhancesthe
thecompetitive
competitivestrength
strengthofof
the
thecompany
companyandand produces
producesbetter
betterquality
qualityproducts
productsatatreduced
reducedcosts.
costs.
Frequency
Frequencyand andquantity
quantityofofpurchases:
purchases:Indigo
Indigo Airlines
Airlinescan
canadapt
adaptitsitsmarketing
marketingstrategies
strategies
according
accordingtotochanges
changesininfrequency
frequencyandandquantity
quantitybybyoffering
offeringmore
morediscounts
discountsand
andfamily
family
deals.
deals.
Customer
Customer Brandloyalty:
Brand loyalty:Indigo
IndigoAirlines
Airlinesoperates
operatesininthe
thelow-involvement
low-involvementproduct
productcategory.
category.Indigo
Indigo
Airline’s
Airline’scustomers
customersareareprice
pricesensitiveIndigo
sensitiveIndigoAirlines
Airlinestotoinvest
investinincustomer
customerresearch
research
activities and closely monitor their attitude and consumption
activities and closely monitor their attitude and consumption behavior.behavior.
Customer
Customerneeds:
needs:IndiGo
IndiGoidentifies
identifiesthe
thecritical
criticalcustomer
customerdesired
desiredfeatures
featuresand
andincorporate
incorporate
them
theminto
intomarketing
marketingand andadvertising
advertisingstrategies.
strategies.Prioritizes
Prioritizesthe
thequality
qualityover
overprice
pricealso
alsohave
have
important consequences for the organization.
important consequences for the organization.
Bargaining
Bargainingpower
powerofofbuyers:
buyers:Strong
Strongbargaining
bargainingpower
powerofofbuyers
buyersputs
putsdownward
downwardpressure
pressureonon
pricing
pricingand
andinduces
inducesIndigo
IndigoAirlines
Airlinestotooffer
offerthe
thehigh-quality
high-qualityproduct
productatatdiscounted
discountedpricing.
pricing.
Porters's
Porters's Competitors
55Forces Competitors Bargaining
BargainingPower
PowerofofSuppliers:
Suppliers:Weak
Weakbargaining
bargainingpower
powerofofsupplier
suppliermakes
makesititcomparatively
comparatively
Forces less
lessimportant
importantstrategic
strategicissue
issuefor
forIndigo
IndigoAirlines
Airlinesasassuppliers
supplierscannot
cannotdictate
dictatethe
theprices
pricesand
and
must
mustaccept
acceptthe
theIndigo
IndigoAirline’s
Airline’sterms
termsand
andconditions.
conditions.
Competitive
CompetitiveRivalry:
Rivalry:Currently,
Currently,the therivalry
rivalryamong
amongcompetitors
competitorsisishigh,
high,which
whichmakes
makesititdifficult
difficult
for
forIndigo
IndigoAirlines
Airlinestotoachieve
achieveitsitsmarket
marketgrowth
growthobjectives.
objectives.Intense
Intensecompetitive
competitiverivalry
rivalryisisaa
major
majorreason
reasonfor
forIndigo
IndigoAirline’s
Airline’sdeclining
decliningprofitability.
profitability.
Indigo
Indigo Airlines
Airlinestotoconduct
conductaadetailed
detailedvalue
valuechain
chainanalysis
analysisand
andcarefully
carefullyconsider
considerthe
the
bargaining
bargaining power
powerofofsuppliers
suppliers totoexplore
explorethe
thecollaboration
collaborationopportunities.
opportunities.
Collaborators
Collaboratorsinclude
include the
thedownstream
downstreamand
andupstream
upstreamvalue
valuechain
chainpartners,
partners,business
business
Collaborators allies,
allies,community
community leaders,
leaders,government,
government,and
andothers.
others.
Collaborators
The
Thedetailed
detailedcollaborator
collaboratoranalysis
analysisallows
allowsIndigo
IndigoAirlines
Airlinestotoenhance
enhanceand
anditsitssupply
supply chain
chain
efficiency
efficiencyand
andincrease
increasecontrol
controlover
overititthrough
throughvertical
verticalintegration.
integration.
Political
PoliticalContext:
Context:Indigo
Indigo Airlines
Airlinesstudies
studiesthe
thechanging
changing government
governmentpolicies
policiesclosely
closelygeopolitical
geopoliticalrisks
riskshave
have
increased
increasedrecent
recentdevelopments
developmentsininthe
theglobal
globalpolitical
politicalscenario
scenario
Context
Context Economic
EconomicContext:
Context:Indigo
IndigoAirlines
Airlinestotoadapts
adaptstheir
theirstrategies
strategiesaccording
accordingtotoconsumer
consumerbehavior,
behavior,which
whichisis
different
differentduring
during recession
recessionand
andboom.
boom.customers’
customers’purchasing
purchasing power
powershould
shouldalso
alsobebeconsidered
consideredtotomake
make
effective
effectivemarketing
marketingstrategies.
strategies.
Technological
TechnologicalContext:The
Context:Thetechnological
technologicaladvancement
advancementhashasshortened
shortenedthetheproduct
product life
lifecycles,Indigo
cycles,IndigoAirlines
Airlinestoto
enhance
enhanceitsitsvalue
valuechain
chainefficiency
efficiencyand
andlowered
loweredproduction
productioncost
costand
andincreased
increasedthetheneed
needtotorestructure
restructurethe
the
supply
supplychain.
chain.
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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Branding strategy of IndiGo Airlines
Competence
1. Reliability, and
assrance of
Emergency Travel
Sincerity 2. Consistence Growth Sophitication
Performance
1. High On-Time 1. Elegance and
Performance Elite Class Service
2. Transperancy in irrespective of
Serving Economical Price
3. Down-to-Earth
Excitement Ruggedness
1. Innovative, IndiGo 1. Firm and admant
Yoing and New Brand of providing quality
Aircrafts service alongwith
2. Spirited, Up- Personality commitment to on
to-Date time performance
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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Campaigns of IndiGo Airlines
The Campaigns designed by IndiGo airlines had went on exceptionally well to create an Image
of being the “Coolest Airlines” along with also to highlight the Jey Features of IndiGo Airlines
that is being On-Time Always, Most Cost Effective, and also presence everywhere. The printed
campaigns were quirky and, in an instant, drew the customers towards its advertisements.
Some of the Campaigns are Mentioned below.
“Sleep with Your Wife” – Targeted to pitch the point of getting home on time by using
IndiGo’s on time service of Flights.
“Late is a 4 Letter Word”- Quirky, yet indicative of the On-Time Performance
characteristic of the IndiGo Airlines, launched during in the Month of February to be in
current trend as well.
“IST- Indian Standard Time”- This advertisement was launched as soon as the
company to be the most time efficient flight service, ideal for daily travelers.
IndiGo 6E Connection Contest- This Campaign was organized by IndiGo to have a
more customer interaction with the company over the social media platform. Customers
were directly in touch with the company and #IndiGo6E was floated across various
platforms to share stories and experiences with company.
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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References:
Marketing Management by Philip Kotler
Data Obtained from Euromonitor, DGCA (official Website), IATA
www.wordpress.com
www.indigo.com
Consumer behavior on indigo airlines by Vedshree Upadhyay
MM-1 Term Assignment, IndiGo Airlines Analysis Prepared by, Neil Majumder, 20PGP131
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