A Case About Indigo Airlines

2351 Words Feb 21st, 2011 10 Pages
UP, UP AND AWAY
AIR OF CONFIDENCE How Indigo went from being a small airline to a spunky player which took on aviation biggies to grab third spot in the market
Tushar Srivastava

A decade ago, they were just another bunch of travel agents in a sea of similar Commission brokers. But Kabul Bhatia apparently knew how to make sense of the decades that his family-run busi¬ness, InterGlobe Enterprises had put in, doing the stuff and turning it into something bigger.

Barely five years after it started off as a humble budget airline that people hardly noticed, Gurgaon-based IndiGo Airlines has emerged as a big challenger in India's aviation industry, taking on deep-pocketed industry leaders Jet Airways and Kingfisher Airlines.

Its strategy to
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Bhatia, the Group Managing Director for InterGlobe, who has had a two-year stint with IBM, got the Kolkata-born, former CEO of US Airways, Rakesh Gangwal, as a partner. An engineer from IIT Kanpur, Gangwal had previ¬ously worked with Air France. "They had a well-structured business plan and got the right team. The first CEO, Bruce Ashby built the right systems, processes and competitive cost struc¬tures. Gangwal has vast experience of global aircraft financing acquisition while Bhatia has over 30-years experi¬ence of the sector. The 'game-chang¬ing order' of 100 aircraft in 2005 gave a tremendous leverage to the compa¬ny in pricing terms," said Kaul. 'We've been concentrating on what the cus¬tomer wants: on-time departures, clean aircraft and good and clean flying expe¬rience. We plan to stick to these and not try anything funny, "Aditya Ghosh, President, IndiGo told HT.

The airline has an impressive on-time performance record (80.6% for November 2010).

Indigo and its promoters are known to keep a very low profile - again some¬thing that makes them very different from their high-profile media savvy competitors - with marginal spending on advertising and marketing. They have instead relied on word of mouth publicity to build a dedicated client base.

"He doesn't open up easily," says Rajji Rai, Bhatia's senior at Modern School Barakhamba Road.

However, the airline is known to make news with its smart business moves. In 2005, at the Paris air show, the