Indigo competitive analysis


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Analysis of Indigo airlines and airline industrty

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  • AnalysisKF is combined share of full fledged and low cost airlineHence, Indigo is the market leader in LCC segment (29 %) and over all 19% share.
  • Full fledged carrier like Jet, KF share resources between LCC and FFC ( full fledged carrier)Highest Load factor of Indigo therby maximum utilization of resourcesJetLite employee count is less but Jet Airways emloyeesappraochs 6000. Same for KF
  • Govt regulation prevents indian carrier for starting international operations before 5 years of inception. Hence indigo started late.
  • Duranto Is for long distance and shatabdi is for short distance
  • Entry of foreign carriers in domestic market is not allowed due to FDI and equity holding barriers. Foreign airlines cannot hold equity of domestic carriers.2/3 Directors should be of indian origin
  • There is only 1 airport per city in IndiaAFFPL implemented after 2006
  • There is only 1 airport per city in IndiaAFFPL implemented after 2006
  • There is only 1 airport per city in IndiaAFFPL implemented after 2006
  • Indigo competitive analysis

    1. 1.  Leading Low Cost Carrier in India Founded in 2006 First flight Delhi-Guwahati-Imphal 4th August 2006 Presently 26 destinations in India, 259 flights everyday A fleet of 43 A320 in service ( August 2011) 238 A320 on order, expected a total of 100 A320 by 2015
    2. 2. IndustryCompetition
    3. 3. Market Share In LCC segment Go Air 9% Indigo 29% Indigo SpiceJetKingfisher jetLite 30% Kingfisher Go Air SpiceJet jetLite 21% 11%
    4. 4. Jetlite Indigo Kingfisher SpiceJet Fleet Size 25 25 66 20Personnel 1542 2320 7695 2458 PassengerLoad Factor 74.9 80.0 72.7 76.6
    5. 5.  Fees and surcharges forms the major component in prices Highly Competitive Prices with very narrow variation No distinguishing service like Seat preference, meal or any other VAS which could set Indigo apart Imphal- Airlines Delhi-Mumbai Mumbai- Blore Guwahati Indigo 3185 2428 1979 SpiceJet 3184 2431 NA KF Red 3834 2880 2353 Jetlite 3034 2284 2130
    6. 6. Continuous High performance by Indigo Airlinescould be a distinguishing factorBrand building based on this factor Airline On Time Performance Indigo 84% SpiceJet 84% JetLite 54% Kingfisher 70%
    7. 7.  Competitor include home grown carrier like SpiceJet, Kingfisher and international LCC like AirAsia, Air Arabia , Fly Dubai International Operations started from 1 Sept 2011 34% route authority in domestic market not utilized indicates strong competition in domestic segment and higher profit margins in international routes Key target market include SE Asia and West Asia flying out from tier II cities like Trichy , Coimbatore, Amritsar, Khozikode Competitive advantages to international carriers due to govt policies ( entrance) and fuel supply chain
    8. 8. IndustryPotential threat Competition
    9. 9.  Full fledged carriers with low cost subsidiaries ◦ JetConnect, AllianceAir ◦ Sharing personnel, cost and other resources ◦ Better utilization of resources Govt policy to promote regional airlines to promote connectivity in the region ◦ Freedom Aviation Private Ltd to start from 2011 in South India
    10. 10. Indian Railways Subsidized fuel and electricity Current effort to increase speed to 160-200 km/h ◦ Upgrade locomotives and coaches ◦ Introduction of more non stop trains like Duranto and Shatabdi ◦ Improvement on existing conventional lines for up to 200 km/h Future effort ◦ Feasibility study of high speed train in progress ( 350Km/hr) ◦ Long term vision 2020, No concrete steps taken yet
    11. 11.  Several expressways are under construction or different stages of development ◦ Mumbai Pune Expressway ◦ Chennai- Blore Expressway ◦ Mumbai Vadodra Expressway and Ahmedabad- Vadodra Expressway Fuel prices are subsidized
    12. 12. IndustryPotential threat Competition Buyers
    13. 13.  Major crunch ofTravel Portal Web Traffic booking is coming through travelMake My Trip 28.80% portal.  2/3rd of online Yatra 23.05% ticket are booked by top 3 travel portal. Clear trip 15.75%  Bargaining power.
    14. 14. IndustryPotential threat Competition Buyers Substitutes
    15. 15. Over short distances railways and roadways are also an option for consumers Advantages • Cheaper • Take almost same time Routes Roadways Railways Indigo Time Time Time Cost Cost Cost (hrs) (hrs) (hrs)Delhi-Lucknow Rs 750 9.5 Rs 918 7.3 Rs 1450 1.25Chennai-B’lore Rs 650 6 Rs 560 5 Rs 1284 1 ONLY FLIGHT TIMES MENTIONED
    16. 16. North East India Monopoly of LCC in land locked areasInternational Sector No substitutes other than air routes
    17. 17. Supplier IndustryPotential threat Competition Buyers Substitutes
    18. 18.  Airport Infrastructure ◦ Airport Building ◦ Security(CISF) ◦ Baggage Conveyor system ◦ Common X-ray machines ◦ Aerobridges ◦ Airport Fuelling Facilities(Recently e.g. DAFFFPL) Airport Infrastructure players ◦ AAI ◦ Public Private Partnership ◦ Private Monopoly in both AAI/Private players Prices and Airport taxes regulated by AAI and Ministry of civil aviation …Continue d
    19. 19.  Air Traffic Controller ◦ Airport Authority of India Ltd. ◦ Altitude Assignment (higher the altitude better the efficiency) Aircraft Engineering Crew ◦ Inter Globe Aviation(Indigo’s parent company) ◦ British Airlines Engineering ◦ Air France Engineering ◦ Indian Airlines Engineering
    20. 20.  Air Turbine Fuel Suppliers ◦ PSUs: IOCL, BPCL, HPCL ◦ Private: Reliance, Essar, NOCL, Mangalore Refinery Largely Monopoly by PSUs Cost-plus pricing policy ◦ Import parity pricing model ◦ State Taxes plays an important role New Airports following a AFFPL model ◦ AFFPL: Airport Fuelling Facility Private Ltd. ◦ Private players are allowed to push there products ◦ Available only at Delhi, Hyderabad, Bangaluru
    21. 21. Supplier IndustryPotential threat Competition Buyers Substitutes
    22. 22.  rports-allowed-to-decide-on-ATF-suppliers
    23. 23. Questions and queries?
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