IndiGo (Interglobe Aviation) is the largest airline in India and the world’s third largest now as it surpasses Southwest. In an industry that is considered a graveyard, IndiGo has been soaring high in the sky.
IndiGo’s share price increased by 4.73% recently and its market cap. increased to $17.605 billion. In 1 year, the share prices of IndiGo has gone up by close to 90%!
Thus, making it the only Indian airline in the top 10 airlines of the world. In 2023, the company became the first airline in the country to carry 100 million passengers in a single calendar year. It has also touched the landmark of 2000 planned flights in a day.
Last year, the company reported the highest-ever net profit at Rs. 3089 crore. For FY 24, Q3 the company reported more than double profit, standalone at Rs 2998 crore.
From the failure of Jet Airways, Kingfisher, and Air Carnival to the loss in the financial statements of Air India and Spice Jet. What is this Gurgaon-based company doing right that others can’t seem to crack? What is the secret to its success?
IndiGo : Secret Sauce for success
It is the most popular low-cost airline that has only a single-class- economy. The company uses a hub and spoke model to cut costs. They make sure to keep the pricing very competitive.
IndiGo’s sales and leaseback model provides it with a competitive advantage. It involves buying aircraft from manufacturers and selling them. Simultaneously leasing it from the party it was sold to. This reduces the maintenance cost.
In 2022, IndiGo’s on-time performance was 93.4% ranking as number 1 and in 2023, it ranked number 2 with 77.5%.
For a company that takes pride in providing convenience and comfort to its customers, it is equally important to protect and stand up for its employees.
Apart from this, IndiGo only flies to high-frequency destinations, schedules more flights in a day than its competitors and solely focuses on cutting costs. It spends little to no on advertising and relies mostly on word of mouth.
The brand has claimed that it is practically debt-free, unlike other companies in the aviation industry.
Contrasting to Kingfisher’s efforts, IndiGo has never focused on luxury.In a country where flying was seen as a luxury and for the upper class, the company has positioned itself well and sustained in a brutal industry by saving costs and focusing only on increasing carriers and their frequency. IndiGo’s vision is to give wings to the nation and it is doing so by reaching a new high every day.
Full Employee Support
The company supports its employees and is committed to treating them with respect and dignity.
The infamous incident earlier this year when a Delhi to Goa flight was delayed testifies to this claim. It made a passenger impatient which not only resulted in a verbal spat but the passenger also hit the captain of the plane. To this, the company released a statement stating “..treat our crew in the way you want to be treated.”