IndiGo Airlines has kept its lead in Indian aviation market with 27.2 per cent market share in September. According to the aviation ministry, Jet Airways’ September market share stood at 23.8 per cent, SpiceJet came third at 18.5 per cent and Kingfisher Airlines had a tiny 3.5 per cent market share.
Here are the five facts about Indigo Airlines:
How it got to be No. 1
In July 2012, IndiGo outseated Jet Airways as India’s No. 1 carrier with about 27 per cent market share and it has been sustaining the lead till now. This was a huge milestone for a company which was set up only in 2006. Interestingly, the company had not resorted to advertising till very recently and it grew its market share solely on on-time performance, clean aircraft and good on-board services, coupled with low fares.
The company claims a higher aircraft utilisation (an average of 11.5 hours per plane every day) and a quicker turnaround time (about 30 minutes), according to this report. IndiGo operates just 57 planes, compared to 97 by Jet Airways, but the former is able to offer higher capacity as it operates 180-seaters. IndiGo also claims to have the highest 95.3 per cent on-time performance record (using a technology called aircraft communications addressing and reporting system) and the lowest number of complaints per passenger. The other smart cost-saving ways of the airline are that it does not serve hot meals, nor carry cutlery and oven – thus resulting in less fuel burn.
Smart financing & favourable contracts
IndiGo is believed to have resorted to smarter financing arrangements with aircraft leasing companies (sale-and-lease-back models), and it was also able to sign favourable contracts with engine, airframe and other critical component manufacturers, securing warranty claims against defects. This has resulted in lowering its maintenance costs and also avoiding technical snags, which have been a bane of other carriers in India.
Who runs IndiGo Airlines
IndiGo was founded in 2006 by Rahul Bhatia of InterGlobe Enterprises, along with former US Airways CEO Rakesh Gangwal, with the former having about 51 per cent stake. Bhatia has been involved in travel technology and hospitality business and is in charge of operations. Gangwal, who has been an airline executive, is not involved in day-to-day operations. A lot of credit of making IndiGo what it is today is also attributed to its young president Aditya Ghosh. The 37-year-old was a former legal counsel of IndiGo and was hired as president in 2008. He was recently picked by Fortune magazine as one of the 40 top executives under 40 years of age in the world. He told Fortune, “In the airline business, we have many years of growth ahead of us,” and added, “India is a country of more than a billion people with less than 500 commercial planes.”
The numbers are not available publicly. From what has been disclosed, the company turned in profit before tax of Rs 550 crore on a turnover of Rs 2,664 crore in 2009-10. In 2011, the Gurgaon-based low-cost carrier was believed to have recorded 18 per cent growth in profits to Rs 650 crore. But the company is likely to have reported a decline in profits in FY12 due to higher fuel prices. IndiGo president Aditya Ghosh was quoted as saying that “it (profits) will be a fraction” of what they made in 2011 (Rs 650 crore). Nevertheless, IndiGo is currently the only profitable airline in India.
(Edited by Sanghamitra Mandal)