IndiGo has been perhaps the most important success story of current times in Indian aviation. While I don’t travel with them much because I still like my full-service airlines, I’ve been always in awe of them, given I’ve been interested in airlines and aviation since over 15 years now, and I’ve seen a couple of airlines such as Air Deccan and SpiceJet brought to their knees in this particular brand of aviation called no-frills carriers.
But combine big dreams with nice accounting and the ability to place big aircraft orders, and it will give you another story. IndiGo is that story. IndiGo, along with all of these traits, also has had a flawless execution of a business model where they induct planes with clockwork precision, establish their domination in any station they go to, and take a winner takes all approach by keeping airfares low, which either forced their peer group to engage in a fare war and bleed, or just pack up and leave, leaving the market to IndiGo. At the back of this approach is the ability to keep costs low as well, which comes together because they are a new-age airline and familiar with the new way of doing business while keeping cost low.
But there was a limit to flying all the popular routes, so last year, they changed track and started to open new virgin routes, many a times between tier 2 and tier 3 cities, such as Bangalore and Gorakhpur which was an unserved sector, chipping away market share from the other carriers.
IndiGo started flying abroad a few years ago. They flew to all the places Indians love flying to, such as Dubai, Bangkok and the works. The airline has over 200 aircraft in its fleet now, and has also launched a slew of flights to the Middle-East from various tier-2 cities such as Ahmedabad and the new Kannur airport, giving them direct connectivity, and hence compensating for some of the discomfort of flying no-frills by cutting the time and money required to fly via hub airports. And for the airline, they haven’t even put the pedal on the gas yet. As per the management statements, the airline will deploy 30 percent of its new capacity added over the current quarter (Jan-Mar 2019) to international flights.
25/01/19 CNBC TV18
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But combine big dreams with nice accounting and the ability to place big aircraft orders, and it will give you another story. IndiGo is that story. IndiGo, along with all of these traits, also has had a flawless execution of a business model where they induct planes with clockwork precision, establish their domination in any station they go to, and take a winner takes all approach by keeping airfares low, which either forced their peer group to engage in a fare war and bleed, or just pack up and leave, leaving the market to IndiGo. At the back of this approach is the ability to keep costs low as well, which comes together because they are a new-age airline and familiar with the new way of doing business while keeping cost low.
But there was a limit to flying all the popular routes, so last year, they changed track and started to open new virgin routes, many a times between tier 2 and tier 3 cities, such as Bangalore and Gorakhpur which was an unserved sector, chipping away market share from the other carriers.
IndiGo started flying abroad a few years ago. They flew to all the places Indians love flying to, such as Dubai, Bangkok and the works. The airline has over 200 aircraft in its fleet now, and has also launched a slew of flights to the Middle-East from various tier-2 cities such as Ahmedabad and the new Kannur airport, giving them direct connectivity, and hence compensating for some of the discomfort of flying no-frills by cutting the time and money required to fly via hub airports. And for the airline, they haven’t even put the pedal on the gas yet. As per the management statements, the airline will deploy 30 percent of its new capacity added over the current quarter (Jan-Mar 2019) to international flights.
25/01/19 CNBC TV18
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