The Indigo Story: "On Time, Hassle Free"

16 Pages Posted: 1 Jun 2017

See all articles by Elliott N. Weiss

Elliott N. Weiss

University of Virginia - Darden School of Business

Gerry Yemen

University of Virginia - Darden School of Business

Abstract

The airline passenger industry in India was a mess in 2013, but the low-cost carrier IndiGo was making money. This relatively new company had managed to work against the odds and grab market share from longer-established flyers. Still, the weak rupee, depreciated by 15%, was sending a chill wind through the aviation sector, and growth plans would have to include opening new destinations. This meant hiring more employees, opening more ticketing stations, and increasing costs. Could the airline continue its climb, or would it be prudent to prepare for a hard landing?

Excerpt

UVA-OM-1505

Dec. 10, 2013

THE INDIGO STORY: “ON TIME, HASSLE FREE”

For us, not only was the sector difficult, but the physical infrastructure bottlenecks when we started 5 years ago complicated the problem even more. The third element was the customer perception of low-cost airlines—delayed or cancelled flights, dirty planes etc. So it wasn't about a one billion dollar idea—there was a series of small innovations.

—Aditya Ghosh, president, IndiGo

With a recent government bailout of India's national carrier, a once thriving independent airline looking as if it were close to folding, fuel prices at a long-time high, and even higher debt levels among carriers, the airline passenger industry in India was a mess. Yet there was one low-cost carrier (LCC) that was making money in 2013: InterGlobe Aviation or more simply IndiGo. This relatively new company had managed to work against the odds and grab market share from longer-established flyers. Still the weak rupee, depreciated by 15%, was sending a chill wind through the aviation sector, and growth plans would have to include opening new destinations, which would mean hiring more employees, opening more ticketing stations, and increasing costs. Could the airline continue its climb or would it be prudent to prepare for a hard landing?

. . .

Keywords: growth strategy, market share, brand building, on-time performance

Suggested Citation

Weiss, Elliott N. and Yemen, Gerry, The Indigo Story: "On Time, Hassle Free". Darden Case No. UVA-OM-1505, Available at SSRN: https://ssrn.com/abstract=2975007 or http://dx.doi.org/10.2139/ssrn.2975007

Elliott N. Weiss (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=4375

Gerry Yemen

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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