indigo competitive analysis
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Analysis of Indigo airlines and airline industrtyTRANSCRIPT
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Competitive analysis of Indigo Airlines
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Indigo Airlines Highlights 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
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The Big Picture of Competitive Analysis
Industry Competition
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Industry Competitors in Domestic Market
Indigo29%
SpiceJet21%
jetLite11%
Kingfisher29%
Go Air9%
Market Share In LCC segment
IndigoSpiceJetjetLiteKingfisherGo Air
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Jetlite Indigo Kingfisher SpiceJet
Fleet Size 25 25 66 20
Personnel 1542 2320 7695 2458
Passenger Load Factor 74.9 80.0 72.7 76.6
Comparison of Assets and Load Factor ( March‘10)
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Airlines Delhi-Mumbai Mumbai- Blore Imphal- Guwahati
Indigo 3185 2428 1979SpiceJet 3184 2431 NA
KF Red 3834 2880 2353
Jetlite 3034 2284 2130
Comparison of Fares (Two weeks advance booking)
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
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Airline On Time Performance
Indigo 84%
SpiceJet 84%
JetLite 54%
Kingfisher 70%
On-Time performanceContinuous High performance by Indigo Airlines could be a distinguishing factorBrand building based on this factor
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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
Competition in International Market
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The Big Picture of Competitive Analysis
Industry CompetitionPotential threat
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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
Threat within Aviation Industry
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Indian RailwaysSubsidized 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
Threats from Railways
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Several expressways are under construction or different stages of development
◦ Mumbai Pune Expressway◦ Chennai- Blore Expressway◦ Mumbai Vadodra Expressway and Ahmedabad-
Vadodra ExpresswayFuel prices are subsidized
Threat from Roadways
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The Big Picture of Competitive Analysis
Industry Competition BuyersPotential threat
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Travel Portal Web Traffic
Make My Trip 28.80%
Yatra 23.05%
Clear trip 15.75%
Major crunch of booking is coming through travel portal.
2/3rd of online ticket are booked by top 3 travel portal.
Bargaining power.
Market Share of Travel Portals
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The Big Picture of Competitive Analysis
Industry Competition BuyersPotential threat
Substitutes
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Over short distances railways and roadways are also an option for consumers
Advantages• Cheaper• Take almost same time
Threat from substitutes:-Domestic Markets
Routes Roadways Railways Indigo
Cost Time (hrs) Cost Time
(hrs) Cost Time (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
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North East India Monopoly of LCC in land locked areas
International Sector No substitutes other than air routes
Inefficient substitutes
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The Big Picture of Competitive Analysis
Industry Competition
Supplier
BuyersPotential threat
Substitutes
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Suppliers 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 …Continued
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…Suppliers Continued 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
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…Suppliers Continued 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
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The Big Picture of Competitive Analysis
Industry Competition
Supplier
BuyersPotential threat
Substitutes
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References http://indiaaviation.aero/news/airline/1793/59/
Airports-allowed-to-decide-on-ATF-suppliers www.DGCA.nic.in Hindu.com Yatra.com Flightstat.com
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Questions and queries?
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