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Strategic Managing INDIGO FLIGHT COMPANIES Europe Asia Business School Strategic Administration Your Tutors Name: Prof. Bella Retainer Full name of the student: Deepak Namram Complete name of the student: Gargi Kumari Full name of the student: Sujata Sah Student number: 09104 Student amount: 09105 Pupil number: 09121 Due Date: tenth Sep 2009 Date published: 10th Sep 2009 All of us declare the attached job is our own work and has not recently been submitted, in whole or in part, intended for assessment in just about any other unit. We have stored a copy with this assignment to get my own records.
Signed Signed Signed ___________________________________________________ ___________________________________________________ ___________________________________________________ Europe Asia Business College 1 Proper Management INDIGO AIRLINES INDEX Executive Brief summary Introduction Exterior Environment Evaluation Airline Industry Attractiveness Porter’s Five Makes Opportunities Dangers 3 four 6 six 6 11 12 Inside Environment Research Tangible Resources Intangible Solutions Criteria of Sustainable Competitive Advantage Value Chain Evaluation Strength Some weakness 13 13 13 15 16 17 17
TOWS Feasible alternatives Final Recommendation APPENDIX A APPENDIX B BIBLIOGRAPHY 18 19 twenty 21 twenty four 25 Europe Asia Business School 2 Strategic Administration INDIGO AIRLINES Executive Synopsis Objectives The objective of this record is to study the external environment in the Aviation Market in India. Subsequently, inner environment evaluation is conducted for IndiGo Airlines. With the help of this complete study, we now have suggested tips that can be adopted by IndiGo to sustain its competitive advantage by utilizing its cost command strategy.
Strategies to understand the key elements responsible for the formulation of corporate technique, we have employed Strategic Supervision tools like Porter’s Five Forces model, Value Cycle analysis, TOWS matrix and so forth Limitations Due to confidentiality terms and corporate guidelines of the firm, accurate economical data could not be acquired for IndiGo Airlines. Nevertheless , most recent and reliable info sources have been referenced to get the research of this circumstance. Findings IndiGo airlines came into the low price carrier industry in modern aviation industry in 2006.
It has been in a position to achieve the break even inside two years of its release and provides reported gross revenue of 60 crores this year. Regardless of the decline inside the aviation sector and global economic slow down, IndiGo offers accelerated their growth level. Also, IndiGo being a new entrant provides managed to become a cost innovator in its sector. Europe Asia Business University 3 Ideal Management INDIGO AIRLINES Advantages India is among the fastest growing aviation industries in the world.
Because of the introduction of liberalization policy in the American indian aviation sector, the industry has seen a vast big difference with the entrance of the privately owned total service air carriers and low cost carriers. In 2006, the non-public carriers made up around 73% share from the domestic aviation market. Besides, there was significant increase in the amount of domestic flights passengers. A few of the factors that contain resulted in bigger demand for air transport in India include the growing purchasing power of middle section class, low airfares provided by low cost service providers and the growth of the travel industry in India.
In addition to the liberalization plan, the deregulation policy has also played an important role to encourage personal players in the aviation market. Below graph shows the gradual development in the home air traffic: The growth in the aviation sector looked encouraging and hence captivated many low priced carriers like SpiceJet, GoAir and IndiGo after the accomplishment of Air flow Deccan in 2003. On one hand, the booming opportunities incited players to expand capability but on the other hand, rising fuel costs and taxation rates, increased the detailed costs.
Hence the low-cost players identified it difficult to keep their commitment. In their need to survive, these people were compelled to improve prices, add free drinks and refreshments on-board, and so forth Some players sought refuge in mergers, whereas a few survived by modifying their business model. Nevertheless , amidst this aviation uncertainty, IndiGo continuing to fly high. In its endeavour to consistently keep low costs, IndiGo resorted to measures like outsourced workers and creating a homogeneous fast. These attempts helped IndiGo to offer its passengers low air prices.
IndiGo is definitely the latest entrant as a low cost carrier in the aviation market of India. It started out its businesses on August 4, 06\. InterGlobe Enterprises, a famous travel corporation, is the owner of IndiGo. The IndiGo team uses all of these solutions to design procedures and rules that are safe and simple, that will make sense, and this cut squander and complications, which in turn guarantees a distinctly smooth, smooth, precise, gimmick-free customer encounter at fares that are always affordable. It had been awarded it of ‘Best Domestic Low priced Carrier’ in India intended for 2008.
The airline at present operates 120 daily flights with a fleet of nineteen brand-new Airbus A320 aircraft and flies to 17 locations. IndiGo plans to serve approximately 40 Indian towns by 2010, with a fleet of approximately forty five A320s. you Below are the key factors with the business model of IndiGo airlines: ¢ ¢ ¢ An individual passenger class. Single kind of airplane to reduce training and service expense. No extras such as free food/drinks, lounges. 1 http://www. interglobe. com/ig-aviation. aspx The european countries Asia Business School some Strategic Managing INDIGO AIRLINES ¢ ¢ ¢
Emphasis on direct sale for ticket through Internet in order to avoid fee and commissions paid to travel agents. Employees working in multiple tasks. Unbundling of ancillary expenses to make the subject fare reduced. In this survey, we can analyse what strategies IndiGo followed to the flying industry. Also, we can discuss just how IndiGo executed the low cost strategy to gain competitive edge and provide recommendations to maintain its competitive position in the long-term. To know about the industry elegance of modern aviation and the factors that helped IndiGo enter into this market, we will use the Porter’s Five Forces unit.
This will end up being useful in attaining insight regarding the entry barriers, benefits of buyers and suppliers, competition among the existing players plus the feasible alternatives in aviation industry. SWOT analysis in the company will assist us be familiar with current setting of the organization based on the analysis of external and internal environments. For interior analysis, we all will examine the criteria to get sustainable competitive advantage in addition to the Value String Analysis. This will help to identify the strengths and weaknesses of the firm.
Further, the analysis of government policies, competitor’s strategies and other variables just like fuel rates, increasing household traffic, downturn in the economy etc is going to lead us to the external influences that affect the aviators industry of India. Therefore, using the exterior environment study, we can arrive to know regarding the opportunities and dangers for IndiGo airlines. As a result, the consequences and influence in the all elements of SWOT taken together will aid in the formulation of alternative strategic activities that IndiGo may consider to preserve its competitive advantage. Europe Asia Organization School a few Strategic Supervision INDIGO FLIGHT COMPANIES
External Evaluation Airline Industry Attractiveness 1 . Foreign collateral allowed: Overseas equity approximately 49 % and NRI ( Non-Resident Indian) expenditure up to 75 per cent is permissible in domestic air carriers without any authorities approval installment payments on your Attraction of foreign shores: After five years of domestic operations, a large number of domestic airlines too will be entitled to fly overseas by making use of unutilised bilateral entitlements to Indian providers. 3. Growing income amounts and market profile: Demographically, India has got the highest percentage of people in age group of 20-50 between its 55 million solid middle school, with excessive earning potential.. Untapped potential of Indias tourism: Holiday arrivals in India are expected to expand exponentially, specifically due to the wide open sky insurance plan between India and the SAARC countries plus the increase in zwischenstaatlich entitlements with European countries, and US. 5. Glamour in the airlines: Simply no industry aside from film-making industry is as gorgeous as the airlines. Airline tycoons in the last 100 years, like M. R. D. Tata and Howard Barnes, and Friend Richard Branson and Doctor Vijaya Mallya today, have been idolized. Porter’s Five Causes strategy for Air travel Industry. Menace of New Entrants ¢ Merchandise differentiation: In low cost service providers, there is not much differentiation in the basic assistance that is staying provided for the customers. Differentiation can only be performed by Value Added Services. IndiGo provides check-in kiosks, stair-free ramps, and “Q-Busters. Hence this discussion works in favour of IndiGo. ¢ Switching expense: 1 . The switching expense is not high. Customers can simply choose additional low cost service providers. 2 . The switching expense of an aircarrier company to other business/industry is large as the exit cost is high.
The european countries Asia Organization School 6 Strategic Supervision INDIGO FLIGHT COMPANIES In modern aviation industry the major entry barriers can be: ¢ Government regulations: 1 . The governments open sky insurance plan has motivated many overseas players to the aviation market. installment payments on your Aviation was primarily a government possessed industry. Because of liberalisation Of india aviation industry is now focused by privately owned full-service airlines and lowcost service providers. Private flight companies account for about 75 % share from the domestic aviation market. two Indian Civil Aviation Plan: 3 3.
Private sector is in order to operate slated and non-scheduled services. 4. Operator should be a citizen of India or maybe a company or maybe a body corporate which is authorized in India and whose principal base of organization is in India. 5. Chairman and at least two “thirds of its Directors are Indian people. 6. International equity engagement up to forty-nine percent and investment by simply Non- Citizen Indians (N. R. I), Overseas Company Bodies (OCBs) up to totally is allowed. The manifestation of the overseas investing institution/entity on the Plank of Owners of the firm shall not go over one-third in the total.. International airlines are not permitted to post equity. Foreign financial institutions and other entities whom seek to maintain equity inside the domestic surroundings transport sector shall not have foreign flight companies as their shareholders. 8. In relation to safety and security arrangements, the providers must ensure conformity with relevant regulatory requirements stipulated respectively by the Overseer General of Civil Aviators (DGCA) and the Bureau of Civil Flying Security (BCAS). 9. Intended for green discipline airports, overseas equity about 100 percent is usually allowed through automatic home loan approvals.
For upgrading present airfields, foreign collateral up to 74 percent is allowed through automatic approvals and completely through particular permission (from FIPB). ¢ Setup costs: Nowadays, investment capital of $12 million or less is sufficient to release an air travel. 1 . To be able to overcome the shortfall of aircrafts throughout the peak seasons, airlines can utilize an ACMI lease contract agreement intended for the extra airplane. If the airline has many aircrafts, either owned or operated or leased, then they can provide their excessive aircrafts within their low season to a new airline that is facing top season. a couple of India Ministry of Civil Aviation http://civilaviation. nic. in India Directorate of Municipal Aviation http://dgca. nic. in, Bureau of Civil Flying Security (India) ” http://bcasindia. gov. in 3 The european countries Asia Organization School several Strategic Supervision INDIGO AIR CARRIERS 2 . A great airline business will endure the cost of purchasing an aeroplanes if it wants to start or perhaps expand its fleet, procurment allows the charge to be propagate across several years. At the lease contract term end, the rent can be restored or aeroplanes can be returned, to be replace by more modern airplane. ¢ Gas prices: Home-based ATF prices have increased by above 160 percent from the beginning of 2005 till last year through over 85 per cent by a year-ago levels.
In India, oil companies will not import ATF directly, instead they improve it coming from imported crude oil. With growing crude oil prices, imports are becoming expensive daily and at the same time, the us government is unable to spread the full influence of this rise to the consumer. As a result, the state owned olive oil marketing companies (almost 96 per cent in the market is with state owned or operated firms) are forced to sell diesel powered, petrol, kerosene and LPG at method below price, a cost they may be trying to to some extent make up by simply raising the price of ATF, which is under their particular control.
Consequently prices of ATF in India are much higher than a few of the other Parts of asia. ¢ Reference: The aviators industry in India suffers a deficiency of pilots. The reasons happen to be: 1 . The aspirants can easily receive Commercial Pilot Driving licence (CPL) as long as they carry out a training in another country. 2 . This is because in India, there is a lack of dedicated air travel Instructors, decadeold aircrafts and poor quality training offered at a price much higher than what is offered simply by flying educational institutions in USA, Canada and Australia. 3. Indian study centers provide teaching with the help of their very own training partners in the international countries like U.
S i9000. A, U. K etc . Private air carriers hire pilots, get expatriates or retired personnel from your Air Force or PSU air carriers in senior management positions. Airlines may contract staff such as log cabin crew, ticketing and abfertigung staff members. In airline sector, finding suitable labour-force is incredibly costly. Moreover, due to the liberalization of guidelines by government, foreign and private players frequently poach labor force of competition which leads to talent-drain and thus losses. 2 . Bargaining Benefits of Suppliers ¢ Any airlines in general confront a duopoly of two major suppliers of aircrafts i. e. Airbus and Boeing.
You will discover other suppliers like Dauphin, Dronier, Bells, ATR-42 although do not satisfy the requirements to serve the lower cost business aircraft carriers, particularly IndiGo airlines. Fleet Forecast to get the India-Region 2006-2011 shows that there will 8 Europe Asia Business University Strategic Managing INDIGO AIR CARRIERS be approx. 85% expansion in the order rate of air carriers. Therefore, suppliers are few and thus in better position to bargain because they always finds customers for his or her aircrafts. ¢ ¢ ¢ IndiGo navy comprise of Airbus-A320 and the turning cost is large due to the limited number of suppliers.
Due to shortage of commercial aircraft pilots in India the supply of aviators is concentrated, consequently increasing all their power. You will find only four suppliers to get ATF (Aviation Turbine Fuel), IOC, Hindustan Petroleum Corporation, Bharat Petroleum and ONGC and since their particular number is limited, they own more power. The proof of data for large power liked by ATF suppliers is based on the fact the fact that ATF rates constitute 35-40% of the costs in India compared to 20-25% globally. The rand name value of suppliers is usually high due to their less number and ends in higher negotiating power for them.
The flight companies also encounter a risk of frontward integration since the suppliers are in close contact and are familiar with the knowhow of the aviation market. The suppliers are handful of and thus in better location to bargain as they constantly finds buyers for their aircrafts. ¢ ¢ ¢ ¢ 3. Bargaining Power of Potential buyers ¢ Potential buyers in airlines industry are large in number and highly fragmented thus decreasing their electrical power. With the developing Indian economic climate and elevating low cost companies, the purchasers have improved and so have the growth options. The transitioning cost is nominal since you will discover multiple alternatives available.
It is not necessarily difficult to maneuver from one air travel to another or to switch to an alternative. Furthermore the players in the particular strategic group do possess minimalistic distinguishing points. Backwards integration in the buyers end is very tough and next to impossible. ¢ ¢ ¢ 4. Competitive Rivalry The aviation industry is a very competitive industry because of which it is difficult to earn excessive returns through this sector. Here are the major factors behind the excessive competition in the lowcost company airlines: ¢ Very little range for difference between competitors’ products and services being unfaithful
Europe Asia Business School Strategic Management INDIGO AIR CARRIERS ¢ ¢ ¢ Flying is a fully developed industry with very little growth. The only way to grow through stealing away customers by competitors Suppliers of aircrafts are the same, we. e., Boeing and Airbus. Hence supplier’s bargaining power is excessive. Switching expense of customers is high for low cost carriers, i. e., you cannot find any brand commitment. Closest competition of IndiGo is SpiceJet followed by GoAir. Below can be brief information about all of them: SpiceJet is a low-cost airline based in New Delhi, India.
Spice Jet’s mission is to become India’s preferred affordable airline, providing the lowest air fares with all the highest client value, to price delicate consumers. It is vision is usually to ensure that traveling is no longer limited to business travellers, but is definitely affordable for anyone and thus the tagline ‘flying for everyone’ Spice Fly airways commenced its procedures in May 2006. SpiceJet has chosen an individual aircraft type fleet that allows for better efficiency in maintenance, and supports the low-cost structure.
It has a fleet of 6 Boeing 737-800 in single class configuration with 189 seating. SpiceJets fresh generation number of aircraft is usually backed by leading edge technology and infrastructure in order that the highest criteria in functioning efficiency. Piquancy Jet currently flies to 11 destinations. 4 GoAir Airlines, held by Wadia Group, is a low-cost finances airline located in Mumbai, India. It has been showcased as “The Peoples Airline. GoAir searching for at commoditising air travel by providing airline chairs at slightly higher teach prices to all or any cities in India.
The Airline’s motif line is usually “Experience the Difference and its particular objective is usually to offer their passengers an excellent consistent, quality assured and time efficient product through affordable costs. GoAirs business design has been developed on the being on time, affordability and convenience version. Go Atmosphere operates 4 A320 airplane with a single class, 180-seat configuration, and plans to expand its fleet to 33 aircraft in 36 months. 5 As a result, we can summarize from above data that all three players making the effort to follow cost leadership approach by slashing the ticketed rates to the minimum ossible value. Nevertheless , it is clear that, to sustain through this cutthroat competition, each player will have to think of different ways of improve the non price elements. 4 http://www. zoomtra. com/Airlines/Spicejet. html http://www. zoomtra. com/Airlines/Go-Air. html 5 Europe Asia Business Institution 10 Strategic Management INDIGO AIRLINES a few. Availability of Alternatives The substitute for low cost air travel company is definitely the railways. But this replace is not so powerful because of the following factors: 1 . Clients use aircarrier transport as it is convenient and saves travelling time.
Therefore trains simply cannot work as a substitute to save period. 2 . Secondly, many clients use airlines as a position symbol. And so again, teaches cannot replacement for prestige. Therefore if we consider IndiGo airlines, the immediate substitutes would be the other affordable carriers like SpiceJet and GoAir. Thus in this case, menace of alternatives is substantial as the switching cost between inexpensive carriers can be low. Options ¢ IndiGo airlines have not ventured in to the huge atmosphere freight marketplace which can lead a considerable portion of the revenue. Research by Middle for Asia Pacific Aviators or CAPA6, an aviators consulting firm estimates the cargo companies of 3. mil tonnes each year. According into a research conducted by PhoCus, Indian home traffic can touch eighty six. 1 , 000, 000 by 2010, up by 32. two million in 20077. The flight denseness of IndiGo airlines is restricted in household market, hence there is a big scope to improve the airline flight frequency. The huge untapped international sectors should be explored once IndiGo has a considerable presence in the household market. IndiGo currently will not have too many long haul aircrafts and as per CAPA research by 2020, Indian Air-ports are expected to deal with more than 95 million individuals.
IndiGo air carriers should give attention to long haul aircrafts both pertaining to domestic and international sectors. The chartered flight providers still stay an area not really exploited by simply Indian modern aviation industry and IndiGo air carriers can be an important factor in tapping the potential in this particular marketplace. ¢ ¢ ¢ ¢ 6 Hub for Asia Pacific Aviation ” www. centreforaviation. com 7 www. phocuswright. com Europe Asia Business School 11 Tactical Management INDIGO AIRLINES Hazards ¢ ¢ ¢ ATF (Air Generator Fuel) rates have elevated radically as 2005. Foreign and private players often poach work-force of competitors.
Comprehensive Government Interference can affect the accountability in the organization. In aviation industry, government provides control over energy prices, foreign investments (e. g. FDI policies), tourism laws, income taxes etc . This could greatly impact the day to day organization in the flight industry. Like every other sector, recession provides hit flying industry as well. People have cut down on tourism and corporate travels are also slashed down. The deficit of trained fliers, co-pilots and ground personnel is severely limiting the expansion prospects of all the airline companies.
Barriers leaving in flying industry will be high as a result of high capital investment, zero government limitations and loss of brand picture. ¢ ¢ ¢ The european union Asia Organization School doze Strategic Management INDIGO AIRLINES Internal Environment Analysis Assets, Capabilities and Core Expertise are the key elements of the Inside Environment. The resources are real and intangible. Tangible methods ¢ Aircrafts: The air travel currently functions 120 daily flights using a fleet of nineteen brand new Airbus A320 plane and lures to 18 destinations. Recruiting: 1 . The human resources are the pilots, staff members and ground staff.. No aircarrier can get a student pilot and directly give him to fly an airplane carrying around five-hundred passengers. The labour-force needs to be trained after which assigned with tasks to execute after right evaluation. Gasoline: 1 . Porter’s five forces model will not cover the importance of supporting product. installment payments on your ATF may be the complementary product for plane and this constitutes approximately 35% from the production costs. ¢ ¢ Intangible solutions ¢ Company Equity/Reputation IndiGo is the most reputed low cost jar due to the next reasons: 1 ) On time landings is the key differentiating factor pertaining to IndiGo Air carriers.. IndiGo will keep implementing new and impressive ideas to increase the quality of customer service. The latest example is definitely: IndiGo provides roving “check-in counters in which passengers with only cabin baggage can check-in with an IndiGo official which has a handheld unit, rather than lining up at the check-in counter. a few. It gives the shoppers the freedom to transport their own eatables and snack foods on board. 4. Compared to the immediate competitors, that may be, the additional low cost providers like SpiceJet, Jetlite, and so forth IndiGo supplies the lowest airfare. Social Capital: 1 .
IndiGo has cheery relationship with the other agencies that help the value addition for the service supplied to the buyers. 2 . IndiGo has interested many Travel web-portals and regional travel companies with bonuses like booking commissions, and so forth There have been no instances of problems between IndiGo and its different collaborators, that is certainly, suppliers. ¢ Europe Asia Business Institution 13 Ideal Management INDIGO AIRLINES a few. Collaboration with hotels: Mumbai-based hotel string operator Sarovar Hotels and IndiGo Air carriers announced a marketing tie-up for frequent vacationers. The features are: a.
The layout will allow guests staying at select Sarovar Accommodations across 26 destinations in India to avail a ten per cent discount on their subsequent travel reserving with IndiGo. b. When IndiGo flyers can acquire up to twenty-five per cent lower price on released room contract price, 10 % discount on holiday stay plans and 10 per cent lower price on cafe dining at select Sarovar properties8. Therefore IndiGo provides a remarkable Social Capital. ¢ Brand Consciousness: IndiGo is known as a well known Low priced Carrier in India. This points contribute to the brand understanding of IndiGo: 1 ) Advertising applying print mass media like newspaper publishers, billboards, etc .. It may not purchase an advertisements in a magazine, but continues to be covered in news due to its low cost strategy implementation. several. As IndiGo provides less expensive added providers to the consumers, Word of Mouth advertising also performs in its favor. Employee Relationship: Good Worker Relationship is a key factor to support competitive benefits. IndiGo gives several offers to it is employees. As per the news article published in The Hindu Business Range: “IndiGo officials claimed they own been seeing a healthy expansion in traveler numbers together no plans to delay delivery of any of the 75 Airbus it has ordered. Therefore, it is clearly evident from the above statement that IndiGo can be optimistic regarding its permanent growth. Also, it is about to expand the employee durability and at the same time there is absolutely no indication of downsizing the existing staff. Offered below are several comparisons about the different techniques implemented simply by various flight companies at the time of recession stated in similar article: “At a time the moment several household airlines need to prune their particular staff power, the Delhi-based low cost flight, IndiGo, is on the lookout for more pilots, cabin attendants, customer service and international airport service real estate agents. “In the recent past, both Kingfisher Airlines and Jet Breathing passages have asked their personnel to keep. While Plane Airways provided a “voluntary retirement scheme to much more than 300 of its ¢ 8 http://www. business-standard. com/india/news/sarovar-hotels-indigo-in-marketing -tie-up/60537/on European countries Asia Business School 14 Strategic Administration INDIGO AIR CARRIERS staff, it had been also going to lay away about 1, 900 of its staff. In late Sept. 2010, Kingfisher announced that 300 workers had “parted ways with all the company9. These facts show that IndiGo has considered a positive way while working with its devoted employees during the time of economic slowdown. Four Criteria of Lasting Competitive Benefit: Resources| Airplane Human Resources Energy Brand Equity Social Capital Brand consciousness Employee Romance Valuable Con Y Con Y Sumado a Y Con Rare D N D Y D N N Costly to Imitate Non Substitutable N And N In Y D N Con Y Sumado a Y Sumado a Y Y 9 http://www. thehindubusinessline. com/2008/11/11/stories/2008111151850100. htm European countries Asia Business School 12-15 Strategic Management INDIGO AIR CARRIERS Value String Analysis Europe Asia Business School 16 Strategic Management INDIGO FLIGHT COMPANIES Strengths ¢ ¢ ¢ ¢ ¢ ¢ IndiGo has excessive brand consciousness and brand equity. Cost leadership: Good implementation of low cost approach.
Highly effective management that ensures excessive rate of on- time arrivals. Continuous innovation to improve on no price elements. Tie-up with hotels. Simplicity of ticket reservation for customers. Weaknesses ¢ ¢ ¢ Opportunity of merchandise differentiation is much less. Benefits of the innovations integrated by IndiGo to provide better services for the customers will be short-lived, mainly because these can be very easily imitated by the competitors. IndiGo is not exploring the untrained domestic air cargo market. Europe Asia Business School 17 Strategic Management INDIGO AIRLINES TOWS Strengths(S) 1 ) IndiGo provides high manufacturer awareness and brand collateral.. Cost leadership: Successful rendering of low cost strategy. three or more. Highly successful management that ensures excessive rate of ontime landings. 4. Constant innovation to further improve on not price elements. 5. Tie-up with resorts. 6. Simplicity of ticket reservation for customers. Weaknesses(W) 1 . Scope of merchandise differentiation is much less. 2 . Benefits of the improvements implemented by IndiGo to provide better services to the consumers are short-lived, as these could be easily imitated by the rivals. 3. IndiGo is not present in home-based air cargo market. 4. Not present in International market Opportunities(O) SO
WO 1 . Freight industry 1 . Enhance domestic 1 . IndiGo can easily plan to proceed 2 . Embrace domestic air destinations pertaining to flights international. traffic installment payments on your Upgrade to long haul aircrafts 2 . IndiGo can expand its services 3. Foreign market as per demand to freight/cargo. some. Chartered trip services 3. Diversify to chartered airline flight 5. Promo of local air companies. connectivity six. Development of air-port infrastructure Threats(T) 1 . installment payments on your 3. some. 5. 6. Rising ATF prices Elevating competition Economic slowdown Poaching Government interference Scarcity of trained aviators ST WT of 1. Signal anti poaching 1 .
Continuous innovation negotiating with competition. value added solutions. 2 . Successful incentive programmes to avoid expertise drain. three or more. Hire well trained pilots from a different nation as well as retired Air Force workers. Europe Asia Business School 18 Ideal Management INDIGO AIRLINES Possible Alternatives 1 . Increase home-based operation There are numerous of projects taken up by government to encourage aviation industry, electronic. g., promo of local air connectivity10, Open Atmosphere policy11 and policy of Greenfield airports12. In addition to this, authorities has also made plans intended for the development of international airport infrastructure13. a few airports had been selected for this specific purpose, of these 24 airports will be taken up to get city part development through PPP including maintenance and operation in the terminal structures, cargo operations and real estate property development14. These factors reveal towards a favourable environment for development in the domestic aviation sector. Hence it will be a wise means to fix IndiGo to increase its home-based operations. IndiGo must increase the number of spots and can commence long haul aircrafts. 2 . Extension Currently, IndiGo is paying attention only in domestic passenger flights.
Yet , the freight/cargo market and charted plane service are definitely the areas that can prove to be very good potential marketplace for IndiGo. As per the reports from an economic survey this coming year, it was mentioned that household cargo revealed a growth of 14. 55%15. Besides, chartered flight providers are an untrained market to get IndiGo. As a result, IndiGo includes a huge opportunity to expand in both these circles. To expand air online connectivity on Rate II and Tier III cities and promote regional air online connectivity a separate class of permit, Scheduled Air Transportation (Regional) Solutions had been introduced.
The `Open Sky policy encourages the promotion of Regional Air carriers, lower fares to make modern aviation affordable and remove value monopolies in respect of Aviation Turbine Fuel (ATF). The Policy aims to come with an approval system for setting up of new air-ports. Guidelines pertaining to granting specialized approvals by various firms involved in setting up of an airport would be presented upfront to supply clarity, International airport Authority of India ” www. airportsindia. org. in 12 14 10 Airport terminal infrastructure continues to be undertaken through the PPP route in significant metro urban centers like Delhi, Mumbai, Bangalore and Hyderabad. Modernisation of he Kolkata and Chennai airports is being undertaken by the AAI. Intended for the nonmetro airports AAI is responsible for the airside development. 14 13 http://infrastructure. gov. in/pdf/brochure_airports. pdf file Press Trust of India / Fresh Delhi This summer 2, 2009 15 European countries Asia Organization School 19 Strategic Managing INDIGO AIRLINES Final Recommendation As deduced from the above two solution evaluation, we suggest that IndiGo need to increase its domestic procedures by beginning flights linking to new destinations and long haul plane tickets. As the opportunities are vast for this specific purpose, the various other low cost service providers may also venture in this area.
Thus using the price leadership approach, IndiGo can easily gain competitive advantage over its competition as the first mover. Once the above strategy is successful and leads to promising income growth, IndiGo can use extendable to shipment and chartered services since the next goal for further expansion. Europe Asia Business University 20 Proper Management INDIGO AIRLINES APPENDIX A Exhibit 1: Increase in Indian home-based air traffic 16 Exhibit 2: Predicted growth of fleets in India17 16 seventeen Sources: International airports Authority of India Source: AS MRO Initiative 06\ Europe Asia Business School 1 Proper Management INDIGO AIRLINES Show 3: Business of Affordable Carriers in India in Jan 200918 Exhibit 5: Air Traveling revenue percentage growth19 18 19 Resource: Indian City Aviation Ministry: Source: CMIE, PL Research Europe Asia Business College 22 Strategic Management INDIGO AIRLINES Show 5: Growing ATF rates Europe Asia Business School 23 Tactical Management INDIGO AIRLINES APPENDIX B Demonstrate 6: Comparison of air deals Exhibit several: Comparison of air flow fares European countries Asia Business School 24 Strategic Management INDIGO FLIGHT COMPANIES BIBLIOGRAPHY Websites. www. indigoairtickets. com installment payments on your India Ministry of City Aviation http://civilaviation. nic. in 3. India Directorate of Civil Flying http://dgca. nic. in/ 5. Airport Specialist of India www. airportsindia. org. in/ 5. Bureau of Detrimental Aviation Protection (India) ” http://bcasindia. gov. in/ six. Centre pertaining to Asia Pacific cycles Aviation ” www. centreforaviation. com several. www. cleartrip. com 8. www. infrstructure. gov. in 9. www. interglobe. com 10. www. civilaviation. nic. in 10. www. business-standard. com doze. www. thehindubusinessline. com The european countries Asia Organization School 25
