A census from November 2024 concluded that Indigo airlines has garnered over 60% of the market share. Its low operational costs coupled with its labour efficiency and notable customer service has helped amass its net profit of around INR 81.7!
Striving for Efficiency
Whilst Indigo does offer international flights for its customers, the airline mainly focuses on domestic travel. Considerably, Indigo’s fleet comprises only Airbus aircrafts, namely the Airbus A320 and A321, making the overall maintenance of the airbus significantly easier.This enables the airline to focus more on training their employees for optimum customer service, whilst also keeping operational costs significantly low.
Owing to the fact that indigo receives plenty of trade discounts from purchasing equipment in bulk due to their market size and unwavering reputation, they are able to trim their operational costs further down. Along with this, employees are also cross trained to fill multiple roles, creating a dynamic workforce.
Indigo has also adopted the Fuel Hedging strategy throughout its years in the market which has proven to be fruitful resulting in significant profits. One of airlines’ highest costs would be its fuel costs owing to its heavy reliance on fuel. Indigo airlines have mainly prioritised on lowering their fuel cost by fixing fuel prices over the years through the Fuel Hedging strategy. Furthermore, the strategy is highly efficient during inflation.
Strategies
Another major contributor to Indigo’s soaring profits is their strategic sales and leaseback of their aircrafts,In which they sell them to lessors and lease them back for operational use, cutting back on major costs and allowing Indigo to invest in other aspects of the company such as their marketing.
Indigo offers two seating options, economy and Indigo stretch (with more leg space). The ratio of economy to indigo stretch is considerably high making it clear that indigo understands that most of its customers would opt for economy class. This strategy enables indigo to cater more to the majority consequently offering a relatively better experience to economy passengers in their airline compared to other airlines. Furthermore, Indigo not offering first class to its customers owing to demand has benefited the airline by helping demand of economy seats to be met with relative supply.
Marketing
Indigo being one of the most recommended airlines has harnessed multiple awards namely the Travellers’ Choice 2019, 2018 and 2017 Winner awards which has helped it grow customer trust and loyalty.
Interestingly, Indigo opts for online marketing methods rather than traditional marketing. Indigo has invested in a lot of capital equipment such as technology which has helped it to get pop ups in various websites for people to come across on a daily basis. Considerably, they have developed their own mobile app whilst implementing a passenger service system (PSS) which has proven to enhance customer service.
