BY ZIL SHAH

Aviation Industry in IndiaThe Indian aviation industry is one of the fastest growing aviation industries in the world. India ranks fourth after US, China and Japan in terms of domestic passengers volume.1932 : JRD Tata launched TATA Airline.1948 : Air India International came in- being between Indian Govt. and Air India(TATA Airline).1986 : Private Sectors players permitted as Air taxi operators like Jet, Air Sahara etc.

1994 : Private Carrier permitted to operate scheduled services.2003 : Entry of low cost carriers like SpiceJet, IndiGo, GoAir etc.

Introduction IndiGo is an Indian Low-cost airline with only economy class seating. It’s headquarter is at Gurgaon, India. It is the largest airline in India in terms of passengers flown with market share of

36.5% as of September 2015. This airline offers more than 647 daily flights connecting to 38 destinations. It presently operates a fleet of 98 aircraft belonging to the Airbus A320 family. In 2014, IndiGo carried 21.4 million passengers in the domestic sector alone. India’s best on time performance and least flight

cancellations. It is also one of the fastest growing airlines in the world.

History IndiGo was set up in early 2006 by Rahul Bhatia and Rakesh S Gangwal. IndiGo placed a firm order for 100 Airbus A320-200 aircraft in June 2005. IndiGo’s first Airbus commenced operations on 4 August 2006 with a

service from New Delhi to Imphal via Guwahati. By December 2010, IndiGo replaced the state run flag carrier Air India as

the top third airline in India with market share of 17.3%. In 2011, IndiGo placed an order for 180 aircraft Airbus A320 aircraft in a

deal worth US$15 billion which pushed up the percentage of Airbus aircraft in India to 73%

On 17 August 2012, IndiGo became the largest airline in India with market share of 27%.

In January 2013, IndiGo was the second fastest growing low-cost carrier in Asia behind Indonesian airline Lion Air.

In August 2013, the Center for Asia Pacific Aviation ranked IndiGo among the 10 biggest low-cost carriers in the world.

In August 2015, IndiGo placed an order of 250 Airbus A320neo aircraft worth $27 billion, making it the largest single order ever in Airbus history.

IndiGo announced a Rs.3,200 crore initial public offering on 19th October 2015, scheduled to open on October 27 2015.

LocationHubs Indira Gandhi International Airport (Delhi) Visakhapatnam International Airport (Visakhapatnam)Secondary hubs Chhatrapati Shivaji International Airport (Mumbai) Netaji Subhas Chandra Bose International Airport

(Kolkata)Focus cities Chennai International Airport (Chennai) Kempegowda International Airport (Bengaluru) Rajiv Gandhi International Airport (Hyderabad)

destination IndiGo operates to 38 destinations, 33 in India with more than 647 daily

flights. In January 2011 IndiGo received a license to operate international flights. IndiGo's first international service was launched between New Delhi and

Dubai on 1 September 2011. The international services were expanded to serve Bangkok, Singapore,

Muscat and Kathmandu. IndiGo is considering the launch of flights between Kolkata and Kunming,

China.

How INDIGO makes MONEY ??? Go local-connect with the middle class. It operates on routes which have high traffic. IndiGo’s strategy is to provide more capacity on select routes, rather than spread

itself thinly over several. It offers only economy class seating. IndiGo does not provide complimentary meals in any of its flights, though it does

have a buy-on board in-flight meal programme. No In-flight Entertainment Systems. Only Indian airline to adopt Required navigation performance (RNP) approach:

Fuel and cost savings; Faster turnaround at airports. The airline has trained its crews to de-plane the passengers in 6 minutes and unload

the baggage in 10 minutes. It regularly achieves Turn around times of around 22-25 minutes(Industry Average being much more than 30 minutes).

Model

Frequent & reliable

departures

Highly productive

crew

High aircraft

utilizations

Low ticket prices

Point to point routes

No meals

16 min gate

turnaround

Internet ticket

booking

Limited use of Travel

Agents.

IndiGo the No frills

Airlines

Regular

training

Trained pilots

Highly skilled crew

No connection with other

airlines

Limited passenger

service

Standard fleet of A320

Key success factorIndigo's success can be attributed to certain things which has done differently as compared to others. Single type of airplane to reduce training and service cost. High Passenger load factor – light weight , No. of seats increased. On time performance. One of the lowest Cancellation rate in industry. No frills such as free food/drinks, lounges. Employees working in multiple roles.

Point to point model

Single model of aircraft

Operate on secondary

airport

Single class

configuration

No In-flight services

Fewer employees per aircraft

E-ticketing

Rahul Bhatia The co-founder of the biggest airline in India is known for his smart

moves. With a market share of 51.12%. IndiGo has redefined the private airline space with its on-time

performance and innovative packaging. IndiGo Airlines became India’s largest domestic airline in terms

of market share by taking advantage of troubles at Kingfisher Airlines and Jet Airways.

IndiGo recorded a profit of Rs 550 crore in 2009-10 whereas other airlines were running losses.

For five years in succession, IndiGo has won the Skytrax Awards for being the ‘Best low-cost carrier.

He has already made IndiGo the biggest success story of Indian aviation industry.

Financial HighlightsIndiGo was set up in early 2006 by Rahul Bhatia of InterGlobe Enterprises and Rakesh Gangwal. InterGlobe holds 51.12% stake in IndiGo and 48% is held by Gangwal's Virginia-based company Caelum Investments.

Revenue Net income0

2000

4000

6000

8000

10000

12000

14000

16000

(in c

rore

rupe

es

IPO Details Issue Opens On: Tuesday, October 27, 2015 Issue Closes On: Thursday, October 29, 2015 Issue Price Band: Rs.700– Rs.765 Face Value Per Share: Rs.10 Issue Size: Rs.3,108 crore Proposed Listing: Bombay Stock Exchange and National Stock

Exchange. Lead Managers: Citigroup Global Markets India Private Limited, J.P.

Morgan India Private Limited, Morgan Stanley India Company Private Limited, Barclays Bank PLC, Kotak Mahindra Capital Company Limited, UBS Securities India Private Limited.

Competitors

Passengers carried, April 2015

Indigo Jet Airways Air India Spice Jet Go Air Others0

5

10

15

20

25

30

(In la

khs)

Market share, April 2015

Indigo; 37.80%

Jet Airways; 19.60%

Air India; 16.20%

Spice Jet; 10.80%

Go Air; 8.80%

Others; 6.80%

Bibliography http://www.market-width.com/Air_Traffic_India-2015-April.htm https://en.wikipedia.org/wiki/IndiGo http://www.simpleinterest.in/IndiGo-ipo-review-and-recommendation/ https://book.goIndiGo.in/ http://www.mapsofindia.com/my-india/india/52-top-indian-

personalities-of-2014 http://indiatoday.intoday.in/story/a-guide-to-the-high-and-

mighty/1/134071.html http://articles.economictimes.indiatimes.com/2015-09-11/news/

66434666_1_aditya-ghosh-IndiGo-crore