This document compares IndiGo and AirAsia, two low-cost airlines in India. It discusses their founders and growth strategies. IndiGo, founded by Rahul Bhatia, has become the largest airline in India through innovations like efficient operations and focusing on lower costs. AirAsia, founded by Tony Fernandes, has also seen success by focusing on ancillary revenues through fees and using aggressive marketing. Both airlines have helped revolutionize India's aviation industry through low cost models.

1. MEN BEHIND THE
COMING WAR IN SKIES

3. Drawing a
Comparison
IndiGo AirAsia
• Biggest airline in India
One of the most successful low-cost
carriers in the world.
• Only airline to crack the code to
profits in India’s operating
environment.
Has a global habit of taking on
carriers twice its size on their home
turfs.
• Ruthless efficiency and
punctuality
• Very flashy
• Uses social media
• A host of offers
• CEO duo is closely bound by
similar working styles-shunning
the media spotlight
Founder and CEO revel in the
spotlight, grabbing consumer
attention

4. Street Fighter
 Air Asia- Tony Fernandas, Mittu Chandilya
BIRTH & GROWTH:
 Big Names- Air Asia Berhad (49 per cent), Tata Sons (30 per
cent) and Telstra Tradeplace (21 per cent)
 Started- 2 planes & 2,00,000 passengers to 150 planes & 44
million passengers
 Business Idea- TV interview of Stelios Haji- Loannou,
founder Easy Jet
 Air Asia profit rose by 33% to 139.7 mn
 Within 1 year – broke even , cleared debt

5. Contd. . .
 Indian carriers lost average - $22
 Cumulative loss- Rs 594 billion ($10.1 billion)
 Spice Jet- Rs. 1003.2 Cr last fiscal yr
 Jet Airways- Rs 2154 Cr
 Fernandas -Tough , Motivating
 Chandilya - Man with many ideas

6. SMART
THINKER
 Bhatia took over business Delhi express -launched
InterGlobe enterprises in 1989
 Rakesh Gangwal’s career achievements.
 Possible opportunities in Aviation industry.
 InterGlobe holds 51.12 % stake in indigo
 Dec 2010, Indigo replaced Air India as third largest Indian
carrier
 Aug 2012, ousted Jet Airways
 Indigo had a net profit of 787 Cr in 2013

7. IndiGo
 Traits of Bhatia, (Innovation & foresight + Right
people)
 Bhatia never followed set patterns
 Changing the text book definition of low-fare airlines.
 Marketing and branding
 Dec 2010, Indigo replaced Air India as third largest
Indian carrier
 Aug 2012, ousted Jet Airways
 Indigo had a net profit of 787 Cr in 2013

8. IndiGo’s
Advancement
 Bhatia’s faith in Aditya Ghosh
 IndiGo’s aircraft deals by Gangwal
 Bhaitia and his close associates (The September 11th
incident)
 The September 11th incident.
 Efficient operations, frugal costing and cautious
planning.
 Corporate deals with Tata group with flat rates of
Rs.7000
 TATA Group in Aviation Industry.

9. New Model
 Charge Passengers for check-in luggage
 Others allow 15kg check-in luggage
 GoAir charges Rs.250 a kg for excess luggage
 Passengers cannot consume their own food and
beverages on board
 No show, no refund
 GoAir deduct Rs.1500 as cancellation fee

10. Hot Tickets
 Operating between Bangalore and Goa
 25000 promotional seats were sold out within 48 hours
 First flight was sold out within 10 minutes of launch of
sale
 Fuel accounts for close to 50% of the operating cost
 It will shuttle between Bangalore, Goa and chennai

11. Eye on
Costs
 Planes packed with seats to eliminate expendable costs.
 Low Cost Carriers prefer direct bookings.
 South-West, Spirit Airlines-U.S; Ryan Air-Europe.
 Focus on sustainable lower cost base, operational excellence,
revenue management model.
 Focus on targets in utilization, turnaround time.
 More frequencies- more passengers.

12. Air
Asia’s Ancillary
Revenues
 Excess baggage.
 Seat allocation.
 Travel insurance commissions
 Food and beverage purchases on flights.
 Cargo business.
 Ancillary Revenue per passenger- $12.88

13. Challenges
Faced
 Consistent turnaround time of 30 minutes is impossible
 Congestion of airports leads to delay
 Profitability of AirAsia is low except in Thailand
 AirAsia’s competitors have undercut fares and are
lobbying to prevent launch
 Control only over wages and procurement charges , not
on fuel or tax

14. Money Spinner
 Ancillary revenue is the most important of all as they
offset cheap fares
 Average ticket revenue/passenger fell but ancillary
revenue has gone up
 Bags are a costly component of air travel and add to
fuel burn
 Value-conscious travelers add base fare and ancillary
costs for comparison
 If fares are comparable, choice are made based on time
slots

16. Revolution
 AirAsia’s fare is not that cheap with the add-ons like
baggage
 Cheap fares play a role in buying decision if first-time
travelers
 Travelling light would soon become the future of air
travel in India

17. THANK YOU