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  4. > IndiGo: How to fly high when other airlines are crash landing?

Introduction

IndiGo, an Indian airline, has expanded rapidly to become the second fastest growing low-cost carrier on the continent and one of the biggest globally. IndiGo is focused on the basics, shunning all frills and keeping its operating costs low. In the highly competitive landscape of the Indian aviation sector, it is making solid profits, while other carriers are struggling.

Features and benefits

* This case study analyses the Indian aviation sector, its opportunities and threats.
* This case study analyses the competitive landscape, including major players and their revenues.
* This case study analyses IndiGo airlines and the success of its consistent low-cost strategy.

Highlights

Passenger traffic in India is expanding rapidly and the country is currently ranked fourth globally in terms of domestic passenger volumes. Rising per-capita income and introduction of low cost airlines contribute towards this rapid expansion.
Despite fast increasing passenger volumes, the industry recorded a dramatic loss in 2013. It is also facing great infrastructural issues associated with the need for large investment outlay, high taxes and airport chargers, which combined make India one of the costliest places in the world to run a fleet of planes.
IndiGo has managed to successfully navigate through the many existing challenges and was the only profitable carrier in India, with revenue growth of 55% and net income of $105m in 2013. The company’s successful performance attracted attention of the regulatory authorities.

Your key questions answered

* How big is the Indian aviation sector and how fast is it growing? What are the main growth drivers?
* Why are most of the players struggling with falling income? Why is India one of the costliest places to run a fleet of planes?
* How has liberalization changed the competitive landscape of the Indian aviation sector? Who are the main players of the Indian aviation sector?
* Why is Indigo enjoying strong profit growth while other competitors are struggling?

Table Of Contents

IndiGo: How to fly high when other airlines are crash landing?
OVERVIEW
Catalyst
Summary
INDIA IS THE WORLD'S NINTH LARGEST CIVIL AVIATION MARKET
Double digit increase in passenger traffic for Indian Airports
Low penetration levels indicate strong growth potential
Tourism industry an increase in per capita GDP expected to boost the air traffic
India the third largest aviation industry in the world by 2020
INDIA IS ONE OF THE COSTLIEST PLACES IN THE WORLD TO RUN AN AIRLINE
Despite rising passenger volumes, airline losses approached $2.0bn in 2012
Structural issues main reason behind the struggles of Indian carriers
Fuel costs make up 45.0% of carriers' operating costs
One of the costliest places in the world to run a fleet of planes
Air India enjoys unfair competition
Shortfall of personnel may put more pressure on airlines
DRAMATIC CHANGES IN COMPETITIVE LANDSCAPE OF INDIAN AVIATION SECTOR
Over-capacity issues arising with emergence of no-frills airlines
No-frills carrier dominates Indian domestic flights sector
IndiGo outperformed its competitors with passenger load factor above 80.0%
Kingfisher exit impacted the competitive landscape in 2013
Most major carriers see revenue improvement, but net profits are falling
Emirates Airlines leading the international routes for the first time in history
INDIGO SHOWS HOW TO STAY AFLOAT WHEN OTHER CARRIERS ARE CRASH-LANDING
Indigo is the second fastest growing low-cost carrier on the continent
Strong and consistent focus on low costs helps Indigo beat the competition
IndiGo has a strong reputation for on time performance
Operating only one type of aircraft helps IndiGo knock down operational costs
Hassle free work environment
Ready for global take off but focused on short destinations first
IndiGo under DGCA microscope
IndiGo's setback benefits its rivals
CONCLUSIONS
Indian underpenetrated aviation sector creates opportunities for cost conscience carriers
APPENDIX
Definitions
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