Indigo : A Decade of Path Breaking Success !!

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Amidst   turbulence in the Indian skies and strong  head  winds , Indigo today celebrates its 10th successful year in Indian aviation. A brainchild of the low profile Rakesh Gangwal  , the erstwhile CEO of US Airways  and Rahul Bhaita of Interglobe  India  , Indigo has been path breaking from the word  go

Ordering  an unprecedented 100 planes from Airbus in the Paris Airshow without even getting an Air Operating  Permit from DGCA  spoke volumes for the strategy and confidence of the brand

At a time where all Indian carriers were in the  red , Indigo focused on more important issues like On time performance , quick turnaround time and effective utilization of aircraft. The back end was very efficient and even when oil was at its peak  high , Indigo managed to stay afloat

Expats like Bruce Ashby , the first CEO of Indigo was an exceptional  leader having worked in US Airways earlier .Getting experienced professionals to run the show helped Indigo achieve  a pricing discipline like no other airline.

Sale and Leaseback :  After placing a bulk order with Airbus , Indigo negotiated  a very good discount on the aircraft price . The aircraft was then sold at a margin of almost 5 million to the leasing company and then taken back on lease. The sale and leaseback model gave them a near debt free structure with a good working capital  resulting from the sale of the new plane to the leasing company

Flying Single type of aircraft : Most of the airlines deploy different type of aircrafts resulting in different pilots , different spare parts , different engineering teams and a huge overhead in terms of cost. Air India for instance operates wide bodied  Boeings , narrow body Airbus , dream liners , ATR S and CRJ s .The overheads arising due to  maintenance  of such a varied fleet are  very high

Indigo on the other hand used a single type aircraft , all A320’s and was smart enough to negotiate a spare parts contract with the leasing company

Efficient Route planning : Almost all Indigo planes have an aircraft utilization of 16 hrs a day with a turn around  time of 20 minutes and they fly frequently between two cities ,following  a typical low cost  model. The load factor has been optimized due to this efficient route planning

Today Indigo enjoys a 38% market share making it a market leader and as per the analysts , it will hold half of  the market share in next 12 months. Known for its quirky advertising , witty website which beings with a Go , much to the chagrin of Go airways (  , an In flight magazine Hello 6E which sounds like Hello Sexy and its amazing retail therapy on board , Indigo has a charm of its own.

It is a known fact that since the time Indigo was launched , no other airline has been stable .Kingfisher  debacle  is all over the media , Air India is only flying on tax payers money  , Spice jet  almost  lost its bearings but for the timely intervention of Ajay Singh and  Jet has survived only due to capital infusion by Etihad .

It is therefore very laudable   that Indigo has been consistently profitable for the last 8 years now , a feat which needs to be highly appreciated in an otherwise volatile aviation market

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