Mihir Hombalkar Prathamesh Kulkarni Prachi Vajani Deepesh Chhabra Pranil Deone Anand Lihinar

Indian airlines lost an estimated USD1.65 billion on revenue of USD 9.5 billion in FY2013
India is currently the 9th largest aviation market handling 121 million domestic and 41 million international passengers The air transport in India has attracted foreign direct investment (FDI) worth US$ 456.84 million from April 2000 to July 2013 Foreign Equity & Untapped Potential of Tourism

Market Share of players in Aviation Industry (As of July 2013)

8.3 17.5 29.7 IndiGo Jet Airways-Jet lite Air India Domestic Spice Jet 19.2 25.3 Go Air

Indias largest low fare Carrier

IndiGos Technical Dispatch Reliability is 99.91% making it the airline with the least number of cancellations in India 447 daily flights connecting 34 destinations Six-fold increase in its net profit to Rs 787 crore for the year ending March 2013

PORTERS Five Forces Model PESTLE Analysis SWOT Analysis

Threat of New Entrants 1. Government Regulations 2. Product Differentiation 3. Set Up Costs 4. Resources

1. 2. 3.

Bargaining Power of Suppliers Duopoly of the two major Suppliers Only 4 suppliers for ATF Threat of forward integration

Bargaining Power of Buyers 1. Highly Fragmented Industry 2. Not much Product & Service Differentiation

1. 2. 3. 4. 1. 2.

Competitive Rivalry Mature Industry with very little growth No Customer Loyalty Limited Scope of Product & Service Differentiation Exit Barriers
Availability Of Substitutes Railways but not a very powerful Substitute Other low Cost Airlines

Political/Legal factors
49% FDI in domestic airline sector Slow growth of airport infrastructure, Lack of government initiatives stalling the growth AAI plans to invest massively in next 5 years up to US $ 3.07 billion in metro and non metro airports

Economic factors
Business cycles impact airline industry( treated as luxury during economic downturn) High fuel prices and surging taxes Industry operates under High Cost of Capital Slowing of the economy leading to underutilized capacity

Social factors
Indian population is going through a transition phase Rise in income level of Tier 2 & 3 cities Status symbol Significant rise in number of tourists
Growth of e-commerce & e-ticketing Reduced check in time, helping aircrafts achieve maximum air time The CAT technology has helped pilots to take off even during low visibility hours Increase in global warming Dependency on atmosphere & Climatic condition

Technological factors

Environmental factors

Turnaround time 31 minutes

Load factor Highest of 89.40% Low frills Low operating cost structure

Hub and spoke model for flights

Highest no. of seats and light in weight

High safety Record Brand Awareness Well trained staff Backing from promoters Successful implementation of low cost strategy Highly efficient on-time arrivals (86%) Tie-up with hotels Indigo ramp Elimination of middlemen i.e. Ticket agents

Scope for differentiation is low Services can be quickly imitated Not much international flights Do not have as many routes as competitors Have not explored cargo market

OPPORTUNITIES
Increasing middle class preferences Domestic cargo high demand Only domestic player to show positive signs Increase frequency

THREATS
Fuel price hike Increase in taxes Economic slowdown Advancing technology Poaching of work force High exit barriers

Tangible Resources Physical Resources Human Resources Technology Resource Financial Resource

Intangible Resources Reputation Social capital Brand Awareness Employee Relationship

Financial Health
High Cash Flow Fourth Indian low cost carrier to operate overseas Profitable airline company in India - Order of 180 new aircrafts A320 USD 15 Billion

Low-Fare Flight
Best low cost airline of India & Central Asia Scored a hatrick at SKYTRAX World Airline Awards 2012

Cost Effectiveness
Operating on secondary airport E-ticketing Fewer employees per aircraft More seats per aircraft Selling and leasing back plane

On-time flights Always on time and often before time

Low Turnaround Time Turnaround time for Indigo is less than 30 minutes No complimentary meals

One type of airplane- brand new Airbus A320s One type of fare low One type of customer service professional One type of routes serving destinations within India One type to deal with delays and cancellations - honestly

Be visible go all out to project yourself as future Market Leader Go Local Connect with middle class Focus on core competencies and market them Aim to compete with Railways in the long run

Indigo purchased the aircrafts, then sold them to intermediary and then hire the fleet on lease from then on contractual basis. Use single configuration aircraft. Indigo preferred airbus over Boeing as the fuel efficiency of the former is greater than the latter
Advertising Strategies Airport Hoardings Social Media Collaboration with Multiplexes Magazines Sponsoring Events Use of Regional Languages

Low cost and High Quality Service Price to be differentiated with respect to days before the travel No frills such as free food/ drinks Targeting segments locally based on seasons and festivals

Diversification

Indigo which began its services in 2006, has started its preparation for international expansion. In January 2011, Indigo signed a major procurement deal with Airbus to buy 180 A320s in one of the largest ever deals of its kind IndiGo Airlines offering a diverse array of packages for its passengers: Holiday packages, business packages, religious packages, God's Own Country, hill station trips and Goa's sun & sand. Recently launched EMI options for consumers thereby expanding the potential customer base

Mergers and Acquisition

Indigo bought Republic Airways Frontier for $36 Million

Threat of Imitation
Imitation of business model Economies of Scale Imitation of aircrafts Human Resource imitationCat 3 compliant pilots Cost Leadership rises threat of retaliation High Imitation Lag

Threat of Substitution
Railways Technological Advancement Premium Airlines like Air India, Jet Airways Either of the LCC like Spicejet, GoAir

Added Value
Appropriated Value

Threat of Slack
Training Strikes Benchmarking Sustaining cost leadership by maintaining economies of scale and resources Payment System-incentives

Threat of Hold Up
High power of aircraft suppliers- Boeing and Airbus Limited number of suppliers for ATF Government Interference High power of supplier of pilots due to shortage of pilots