India’a airlines have been struggling in recent years. In 2014, only one major carrier made a profit on the subcontinent: IndiGo. 2015 is shaping up to be better for some of the major carriers in India. This year’s profits are mainly due to the low price of fuel and not any changes in policy or strategy.
IndiGo is now THE airline to invest in in India. The recent IPO for IndiGo’s parent company, InterGlobe Aviation, generated a huge amount of interest amongst investors. This was to be expected after the airline posted profits in each of the past six years.
How did the low-cost carrier do it? India’s airline marketplace has struggled mightily over the past few years. Major carriers like Spicejet, Air India and Jet Airways are either operating at a loss or making a profit, but not enough of a profit to cover their massive debts.
How has IndiGo managed to stay so far in the black? It has taken some of the best aspects of other successful low-cost carriers around the world and added them to its own operational strategy. One of the airline’s founders, billionaire Rahul Bhatia, is notoriously tight-fisted when it comes to business spending. In a 2010 interview, he famously told a Forbes reporter that he questions himself before spending even a single rupee: “Do I need to spend it? Can I get away without it?”
While generating buzz for the IPO, the airline’s president, Aditya Ghosh, explained its extremely simple philosophy: "We focus only on getting customers from point A to B safely along with their bags and serve food that will not make them sick.” Chuckle at that statement if you want, but this mindset has brought the airline to its current $6 billion valuation.
11/12/15 Josh Lew/Travel Pulse
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IndiGo is now THE airline to invest in in India. The recent IPO for IndiGo’s parent company, InterGlobe Aviation, generated a huge amount of interest amongst investors. This was to be expected after the airline posted profits in each of the past six years.
How did the low-cost carrier do it? India’s airline marketplace has struggled mightily over the past few years. Major carriers like Spicejet, Air India and Jet Airways are either operating at a loss or making a profit, but not enough of a profit to cover their massive debts.
How has IndiGo managed to stay so far in the black? It has taken some of the best aspects of other successful low-cost carriers around the world and added them to its own operational strategy. One of the airline’s founders, billionaire Rahul Bhatia, is notoriously tight-fisted when it comes to business spending. In a 2010 interview, he famously told a Forbes reporter that he questions himself before spending even a single rupee: “Do I need to spend it? Can I get away without it?”
While generating buzz for the IPO, the airline’s president, Aditya Ghosh, explained its extremely simple philosophy: "We focus only on getting customers from point A to B safely along with their bags and serve food that will not make them sick.” Chuckle at that statement if you want, but this mindset has brought the airline to its current $6 billion valuation.
11/12/15 Josh Lew/Travel Pulse