Unveiling the Winning Formula: IndiGo Airlines' Success Strategy

As a frequent flyer, I travel across the country often. This one time, while booking a flight, I noticed that I inadvertently I chose IndiGo. During the flight, while talking with a co-passenger, I deduced that majority of Indian air travelers, like myself, prefer IndiGo. Consequently, after coming back, I studied about the aviation sector, to know more about the airline. From my research I realized that the aviation sector in India is under a hit right now. While most of the airlines are under losses, one airline has managed to break the shackles and succeed.

IndiGo is one of the largest and most prominent airlines in the country, known for its budget-friendly fares and extensive domestic and international network. But how did IndiGo manage to create this big market for themselves?

To understand more about the strategies of IndiGo, we need to examine the history of the airline.

While most of the airlines tried to compete against each other to attract customers towards them, IndiGo, on the other hand, kept a whole different transportation segment as its competitor. This competitor was Indian Railways. Most Indians used to prefer traveling with the Railways because of their excellent rail connectivity across the country and affordable fares. However the trend is slowing changing. When we compare the pricing at which IndiGo offered their fare and the fare of the Indian Railways, people could now travel by paying almost the same amount as railways and save much more time and exertion. While it takes 19 hours to travel from Pune to Bangalore by railway and 14 hours by bus, it takes 2-3 hours by flight. This led to more flight bookings and a behavioral change in the customers. People could now travel more often than previously.

When we look into the business strategy of IndiGo we can identify how they are managing to keep the fares low. IndiGo’s low fares can be attributed to its efficient business model. They focus on cost reduction by using a single aircraft type, the Airbus A320 family, which simplifies maintenance and training. By prioritizing costefficiency and utilizing various strategies to keep expenses low, IndiGo can offer affordable fares to customers while maintaining profitability. Additionally, they maintain high aircraft utilization through quick turnaround times at airports, maximizing the number of flights each plane completes in a day. This helps spread out fixed costs over more flights, contributing to lower fares. The airline has a strong domestic network, expansion into underserved markets, and a disciplined approach to capacity expansion.

IndiGo focuses more on low-cost travel rather than the extra benefits that are provided by the airlines. They believe that affordable and punctual travelling is the most important want for any customer and that is how they created a market for themselves. Nevertheless, they do offer various ancillary services, such as priority boarding, extra legroom seats, in-flight meals, and excess baggage allowance, for an additional fee. This “à la carte” approach allows passengers to customize their travel experience and generates extra revenue. In addition, IndiGo uses cargos to transport various types of goods, contributing it’s revenue.

To build brand loyalty within customers, IndiGo mainly focuses on its Customer Relationship Management and Customer Experience Management to a great extent. The emphasis is given on safety, on-time performance and customer service. They have a very customer-centric approach which makes them the first choice among the air travelers. They have attained this by providing a positive flying experience to the customers. This also includes their transparent and simplified fare structure that has resonated well with customers.

Indigo has done an exceptional job in making flying easier, not only for the higher class and business class, but also for the middle-class segment.

According to Statista report, IndiGo hit 55.4% of market share in FY 2022, which is more than any other airline in the country. This shows that the strategies used by IndiGo are working in the Indian market. Now this makes us think, why are other airlines not following these strategies and what effect would it have if they were to follow IndiGo?