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Indigo - Service Marketing (Study)
- 1. 12 - YohanD'souza 26 - Nikhil Mampilly 27 - Leanne Mascarenhas 39 - Elaine Pereira
- 2. Why we chosethe industry ● Tough business - ○ Profit margins are thin, ○ Fixed costs are high, ○ Capital expenditures are large, ○ Government regulation are unstable ○ Outbreak of disease, recession, war or terrorism affects it ● Glamorous business - ○ Breathtaking technology ○ Thrill of defying gravity ○ Childhood dream ○ Allure of exotic destinations ● Supporter of Trade & Tourism “If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it.” President Ronald Reagan.”
- 3. ● Civil AviationIndustry - fastest growing (3 years) ● India considered as 3rd largest domestic civil aviation market in the world; largest in next 10 to 15 years ● India to become 3rd largest air passenger market by 2025; displace UK by 2025 Indian Aviation Industry
- 4. CAGR 12.72% FY06 -FY18 Reached 308.75 Mil India’s 18.28% YoY FY18 293.28 Mil by FY20 1-.43% YoY FY18 76 M by FY20 As of May’18, 558 commercial aircrafts in operation in India Market Size
- 5. Domestic Airline Traffic 1.15million passengers - July’18
- 6. On Time Performance Formetro cities - Delhi, Mumbai, Hyderabad & Bengaluru
- 7. ● Expected towitness $15.52 Billion worth of investments in next 5 years ● $1.83 Billion investment by Indian Govt by 2026 ○ Development of airport infrastructure ○ Aviation navigation services ● AAI to invest $ 2.32 Billion in 2018-19 ○ Expand existing terminals & construct new ones Investment in Indian Aviation
- 8.
- 9. About IndiGo Launch of24 new flights on its network including services on four new routes, the operations on which would start from September 2018. The new routes on which the airline would start operation are between Ahmedabad and Bhubaneswar, Ahmedabad and Varanasi, Hyderabad and Patna and Kolkata and Surat. The airline will provide a second flight between Agartala and Guwahati, Hyderabad and Guwahati, and Kolkata and Nagpur, an airline statement said. The carrier will run a fourth flight between Hyderabad and Bhubaneswar and a fifth flight between Ahmedabad and Hyderabad. The airline has a fleet of 160 Airbus A320 and nine ATR aircraft as of June 30 and offers 1,157 daily flights connecting 44 domestic destinations and eight international destinations.
- 10. IndiGo stands for3 things
- 11. Technological 1. Modern Aircrafts 2.Modernised Airports 3. Greenfield Airports Socio cultural 1. Growing middle class 2. Leisure domestic travel 3. Status Symbol 4. Foreign tourist Political 1. Low entry barriers 2. Open sky policy 3. FDI PEST Economic 1. GDP growth 2. Hike in Average income 3. Rising ATF price Pest Analysis
- 12. Internal factors Strengths 1. CostLeadership 2. High Market share 3. Advertising & Marketing strategies Weakness 1. No differentiation 2. Too many routes 3. Low International recognition External factors Threats 1. High ATF 2. Changing FDI policies 3. Barriers to exit Opportunities 1. International Markets 2. Chartered Services 3. Increase flight frequency SWOT Analysis
- 15. ● Managed toclose a deal for 100 aircrafts and at a low down payment ● They made a bulk deal, which helped them bring down a lot of costs too ● Buying a single type of aircraft (Airbus A320) in similar seating configuration ● A Sale-and-leaseback financial model IndiGo Strategies for success
- 16. Operations end ofthe airline ● Offers only Economy Class seating that accommodates 180 passengers per aircraft ● Does not provide in-flight entertainment or complimentary meals ● Quickest turnaround time IndiGo Strategies for success
- 17. Destinations that theairline flies to ● Lesser number of destinations than its competitors, but then holds a higher frequency IndiGo saves fuel by using different ways ● Software to optimize flight planning ● Airbus A320 NEO ● Fuel hedging ● Aircraft taxies to the terminal with one engine, shutting down the second engine to save fuel IndiGo Strategies for success
- 18. IndiGo Airlines provides2 types of product services: 1. On ground services Product
- 19. ● Check-in andBooking counters ● Kiosks ● Pick-ups and drops ● CarGo IndiGo’s Cargo services named CarGO is catching up very fast as they take very good care of the shipments. They have special packaging for fragile packages which come under 6E priority. They do not accept perishable shipments like seafood, dairy, plants, meat. IndiGo Airlines also carries postal mails like speed post, ordinary mail and Army mail. Product
- 20. 1. In Flightservices Product
- 21. Product ● Meals onBoard : No frills They are separate and have to be paid for. They have a variety of meal options for customers
- 22. ● IndiGo Airlinesis present in a very competitive airlines segment in India ● Price is what gives IndiGo its edge over other competitors ● IndiGo Airlines provides their customer with low fares and quality on time services ● There is a fee charged on flight cancellations and rescheduling ● IndiGo’s cost control department makes optimal use of technology to determine the petrol needed to travel from one place to another Price
- 23. Price 40% Aviation turbinefuel cost out of total Operating costs IndiGo gives discount to senior citizens and students It gives seasonal and time to time discounts on its mobile app and website Provides optional services of meals which are prepaid
- 24. ● Some ofIndiGo’s seats are chargeable which generally are: ○ Seats with extra leg space ○ Front half window and aisle seat. Price
- 25. Place IndiGo Airlines operatesa fleet of 126 Airbus A320 aircraft and since March 2016 it is adding one Airbus A320NEO every month. Currently has 15 Airbus A320 NEOs which promise to burn less fuel hence reducing IndiGo’s operating cost. IndiGo Airlines is trying to expand its overseas network with more flights to Middle east and Southeast Asia. IndiGo Airlines seeks to add Sharjah via different routes to its destinations. Destinations 40+ Covers the length and breadth of India It also covers 6 international destinations which includes Dubai, Singapore, Muscat, Kathmandu, Bangkok and Doha
- 26. Promotion TV commercials, onlineAds, billboards/hoardings Aim: Increase the user base and ropes in new customers
- 27. Promotion IndiGo’s Broadway campaignwhich announced their airlines going international was done by Wieden+Kennedy creative agency It communicated its key offering of reaching everywhere on time and also announced its international operations
- 28. Promotion IndiGo has workedwith agency Wieden + Kennedy building a new, cool airline brand from scratch For example, IndiGo’s triangular paid-for ‘Airwich’ boxes feature interesting stories and fun illustrations to offer passengers something to read when having their meal
- 29. Promotion IndiGo Airlines collaborateswith banks for its promotions, IndiGo-ICICI bank promotion where one would get a cashback if one books the tickets using a ICICI debit or credit card. This gives an insight in the promotion and marketing strategy of the airline’s marketing mix.
- 30. IndiGo Airlines hasdifferent departments for people to work in: The engineering department maintains and repairs each aircraft whenever needed as well as assures quality and regulatory compliance. People
- 31. IndiGo Airlines isknown for its professional cabin crew which gives wonderful service experience and is responsible for high quality service. Since their major responsibility lies in the safety and security of the passengers they go through rigorous training which lasts for 3 months. Pilots are responsible for safe and effective operation of the aircraft. People
- 32. Process Tickets for IndiGoairlines can be booked through different methods: ● Online booking through its website ● Through the mobile app ● On call to the IndiGo call center ● Through authorized travel agents.
- 33. Process ● It has“hold and pay” facilities which allow their customers to hold their bookings for a brief amount of time. ● IndiGo has a highly professional staff which makes sure that their processes are smooth and hassle free. It provides special assistance to passenger with special needs, passengers with infants, Minors, expectant mothers and medical passengers. ● IndiGo has a customer service where people can call in for their queries and suggestions. If the flight is delayed and the customer has provided its mobile number, they are informed in advance about it so that there is no inconvenience caused.
- 34. IndiGo’s corporate officeis situated in Gurgaon. IndiGo Airlines has fulfillment centers where customers can book and pay for their tickets. IndiGo also has physical presence through their airport counters where people can book their tickets and enquire about their travelling details. IndiGo has international reservations offices in Singapore, UAE, New York, Los Angeles, Chicago, Nepal, Toronto, Kuwait, Oman, etc. The aircrafts are well maintained and provides comfortable journey to the passengers. Physical evidence
- 35. Short Term: ● Increasenumber of destinations served ● Offer low prices corporate travel packages ● Offer red-eye flights Long Term: ● Introduce air cargo service ● Offer flights to unserves destinations ...tie up with FSC Recommendations
- 36.
Editor's Notes
- #14 Ill make it into proper flowcharts…..
- #16 rahul Bhatia managed to close a deal for 100 aircrafts and at a low down payment.bcoz of Rakesh Gangwal who was a well known and credible face in the industry. Due to which Airbus was very much fine with accepting his terms. The company not only had to pay a down payment of just 4%, but also received a 40% discount on list price for placing an order for 100 aircraft. The reason for a buying a single type of aircraft (Airbus A320) in similar seating configuration was to make use of the same crew cutting hiring, training, upgradation and maintenance costs. When IndiGo goes shopping, it uses a 6-year sale and leaseback agreement. This model just means they give the aeroplane back after six years, so the airline can induct a new one in its place. The other benefit of such a lease agreement is that, since IndiGo’s aircraft is new, it does not have to go through frequent overall checks, which may call for major repairs. Such a check normally takes place once the aircraft is about eight years old.
- #17 IndiGo has opted to be a low-cost carrier and offers only Economy Class seating that accommodates 180 passengers per aircraft, due to which they don’t have to spend time, money and crew on privilege passengers, or maintain expensive lounges at airports. Then, IndiGo does not provide in-flight entertainment or complimentary meals in any of its flights and offers a buy onboard in-flight meal programme, which helps them to keep fares low. On the other end, IndiGo is also known to maintain the quickest turnaround time. Their ground staff has been trained to deplane all passengers in six minutes, unload and load the hold within 10 minutes, with strict instructions to remove dirt, dust and waste from the aeroplane, and get the plane ready to fly again in 25 minutes or less! A note is also mentioned on the plane that asks passengers to pull the window shades down and rearrange their seat belts to the original position before leaving the plane. Such small steps help them to achieve the turnaround time. And helps the airline to fly about 12 hours every day!
- #18 Talking about the destinations that the airline flies to – IndiGo operates over a lesser number of destinations than its competitors, but then holds a higher frequency. This is achieved because – all of Indigo’s destinations are connected to at least two cities while most are connected to 3 or more destinations. Due to this, Indigo is able to fly for a longer duration and save up on airport charges, and maintain a high aircraft utilization rate of more than 11.5 hours per day per plane. Lastly, domestic fuel taxes can be as high as 30% along with an 8.2% excise duty, which more-or-less accounts for about 45% of the total operating costs. This is 15% more than the global average of 30%. IndiGo saves fuel by using different ways. First, they use software to optimize flight planning for minimum fuel burning routes and altitudes, and also use latest fuel saving technology. Second, Indigo has inducted Airbus A320neo family to their fleet, which claims to deliver 15% less fuel consumption and 8% lower operating costs. The company is also involved in Fuel hedging after the government allowed it in 2007. And IndiGo also has the aircraft taxi to the terminal with one engine, shutting down the second engine to save fuel. This moderates the aeroplane’s speed in the air and saves fuel.
- #19 ON GRND : We chk in ..dir book counters..kiosks(pics.eating) ...pick and drop...CarGo …. LCC INFLGHSE: meal in board..separate..no frills paid for… Airlines provides 2 types of product services: 1. On ground services 2. In flight services low cost passenger air transportation for middle class and lower middle class customers so that they can also experience flight journey supplementary services like web check in, food on board etc. They have a variety of meal options for their consumers. For consumer’s convenience and comfort IndiGo Airlines also provides online booking, mobile ticketing and pick and drop services.
- #20 ON GRND : We chk in ..dir book counters..kiosks(pics.eating) ...pick and drop...CarGo …. LCC INFLGHSE: meal in board..separate..no frills paid for...
- #21 In case of services, the ‘product’ is intangible, heterogeneous and perishable. Moreover, its production and consumption are inseparable. Hence, there is scope for customizing the offering as per customer requirements and the actual customer encounter therefore assumes particular significance.
- #22 ON GRND : We chk in ..dir book counters..kiosks(pics.eating) ...pick and drop...CarGo …. LCC INFLGHSE: meal in board..separate..no frills paid for...
- #27 ads,,,,,,ICICI….promo pics…………….star..
- #28 ads,,,,,,ICICI….promo pics…………….star..
- #29 ads,,,,,,ICICI….promo pics…………….star..
- #30 ads,,,,,,ICICI….promo pics…………….star..
- #35 Buildings….Uniforms ….Airplanes too ...logos