IndiGo has adopted several cost reduction strategies to become one of the most profitable airlines in India. It operates a single type of aircraft (Airbus A320) which allows for streamlined training, maintenance and parts inventory. IndiGo also offers no-frills economy flights without meals or entertainment to reduce costs. Additionally, IndiGo maintains a young average fleet age of 4 years through bulk purchases and short-term leasing to benefit from fuel efficiency and avoid lengthy maintenance checks required for older aircraft. These strategies have helped IndiGo achieve strong financial performance with large profits in recent years.

2. AIRLINES
COST REDUCTION STRATERGIES
Assigned by : Nikita Ma’am
Presented By : Diljit Singh Khalsa
Ronak Gosai
Avni Patel
Rajan Amin
Presentation on :

3. General Overview
Founded : 2006
Commencement of Operations : 8 April 2006
Type: LCC (Low Cost Carrier)
Hubs : Indira Gandhi International Airport (Delhi)
Fleet Size : 101
Destinations : 39
Parent Company : InterGlobe Enterprise
Net Income : INR 1,304 Crores (FY 2014-15)

4. WHY ?
 In Jan 2013, IndiGo was the second fastest growing low cost carrier in Asia.
 In August 2103, the Centre for Asia Pacific Aviation ranked IndiGo among the 10 biggest low
cost carriers in the world.
 Largest airline in India in terms of market share of 36.5% as of September 2015.
 Order of 250 Airbus A320neo in August 2015 is the single biggest order by an airplane from
India worth approximately $27 billion.
 IndiGo is only 1 of two airlines in India who declared profits in FY 2014-15 in the struggling
Indian market.

6. Strategy 1 : SINGLE TYPE OF AIRCRAFT
 IndiGo operates only Airbus’s A320 family of aircrafts in its fleet.
(Air India 10, Jet Airways 9, Spice Jet 3)
 A320 are one of the most fuel efficient planes today.
Benefits:
Greater flexibility.
Low hiring cost.
Low training cost.
Streamline MRO process.
Low up gradation cost.

7. Strategy 2 : NO FRILLS
 IndiGo offers only Economy class with no in-flight entertainment or complementary meals.
Benefits:
Only economy class means more customer per flight.
No frills saves cost.
Do not have to spend time, money or crew on privilege customer.
No need to maintain expensive lounges at airports.

8. Strategy 3 : LOW AVERAGE FLEET AGE
 IndiGo’s average fleet age is approximately 4 years.
 Most airlines have an average of 10-15 years or more.
 IndiGo buy planes or lease planes for 5-6 years of duty and then return them or lease them
forward.
Benefits:
Planes are more fuel efficient when young.
Operating this way helps them avoid D-Check.
D-Check is done compulsorily after 8 years of operation of a plane.
A D-Check may take up to 2 months during which the aircraft remains out of service.

9. Strategy 4 : BULK BUYING & LEASING
 Experts believe that this type of operation alone adds $4 - $5 million per plane.