IndiGo - India's Most Profitable Low Cost Carrier

            

Details


Case Code : CLBS120
Publication date : 2012
Subject : Business Strategy
Industry :Aviation
Length : 03 Pages

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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

As of 2011, the aviation industry in India was going through a turbulent period with several airlines reporting losses. Even in such a scenario, IndiGo managed to run profitably - the only airline to do so. The case looks at some of the strategies that helped IndiGo sustain, grow, and report profits in a tough environment.

Issues:

Sustaining oneself in a tough economic environment
The effect of operational efficiencies on the profitability of a company
The main reasons for the problems in the Indian aviation sector.

Introduction

The Indian aviation industry reported a loss of Rs.150 billion in 2010-11as against a loss of Rs 70.38 billion in 2009-10. Many of the major airlines in the country like Jet Airways, Kingfisher Airlines, and Air India incurred losses. Market analysts attributed these losses to the high price of aviation turbine fuel, high operating costs, rising airport fees, and severe competition. Many of the struggling airline companies sought government intervention to get through the turbulence...

Questions for Discussion:

1. What, according to you, are the main reasons for the turbulence in the Indian aviation Industry?
2. How did IndiGo manage to operate profitably even under tough conditions?
3. What difficulties could a new airline face in India? List the strategies it should follow to operate in a sustainable manner.

Key words:
IndiGo, Indian aviation industry, Low Cost Carrier, Sale and lease back strategy, Airbus, single passenger class





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