Indigo Airlines- Meandering through the Public Policies on the Success Runway – Can it Fly Higher?

Indigo Airlines- Meandering through the Public Policies on the Success Runway – Can it Fly Higher?
Case Code: BSTR507
Case Length: 14 Pages
Period: 2015 - 16
Pub Date: 2017
Teaching Note: Available
Price: Rs.400
Organization: Indigo Airlines
Industry: Civil Aviation
Countries: India
Themes: Business Strategy
Turnaround of Indian Railways: A Tough Road Ahead?
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case describes the journey of Indigo, the airline founded by Rahul Bhatia in 2006 and how it was introduced as a Low Cost Carrier in the market, faced government barriers, and still managed to emerge as one of the fastest growing airlines in India with a market share of 37% as of February 2015. While other airlines like Kingfisher, SpiceJet, and Go Air, were battling to stay on in the market due to the public policies on dispersal guidelines, operating costs, fuel prices, 5/20 norms, and the open skies policy, Indigo used its business model strategically to create a platform for profitability and survival. Being a customer-centric airline, it combined the use of technology, sale and lease back agreements, bulk purchase of fleets, quality training of its staff, and high operational efficiency to create a competitive synergy better than that of other players. Though Bhatia was disappointed with the volatile public policies, he came up with a new innovation each time a policy was introduced for any of the controllable components of his business.

Issues

The case is structured to achieve the following teaching objectives:

  • Outline how entrepreneurial ventures are affected by the government’s policy and how frequently these policies change the business environment in different ways
  • Learn the unique differentiation and study the functionality of a real time business model of a Low Cost Carrier that was used optimally by Indigo to earn good revenues vis-à-vis other airlines in India
  • Discuss the success factors of Indigo in light of its intersection with the public policies and thereby analyze to what extent an entrepreneur can manage through management practices and strategies to ensure that the policies don’t hamper the venture growth
  • Analyze Indigo’s journey (challenges, threats, and opportunities) in the market and identify how strategy making is used to reduce the vagaries of policies being active for most of the decision-making in entrepreneurship

Contents

Keywords

Indigo Airlines, Foreign Direct Investment, Route Dispersal Guidelines, Low Cost carrier, Aircraft Communication Addressing and Reporting System, 5/20 Policy, Directorate General of Civil Aviation, Open Skies policy, Singapore Airlines

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