IndiGo's Low-Cost Carrier Operating Model: Flying High in Turbulent Skies


Code :BSM0052

Year :

Industry : Transportation

Region : India

Teaching Note:Available

Structured Assignment :Available

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Indian LCC Segment: The Rise and Fall On February 18th 1911, the roots of the Indian aviation industry were laid with the first commercial flight between Allahabad (an Indian city) and Naini (a township in Allahabad), covering a distance of nearly 10 km. This was followed by the first domestic airline, connecting Karachi (a city in the country of Pakistan) and New Delhi (Delhi) in December 1912. A collaboration between the Indian State Air Services and the UK-based Imperial Airways, this domestic airline served as an extension to the latter's London-Karachi flight. Despite these humble beginnings, the Indian aviation industry had not actually taken off...

IndiGo's Consistent Focus on the Low-Cost Business Model In June 2005, IndiGo came into existence as a joint venture between Rahul Bhatia, managing director, InterGlobe (travel and technology services company) and Rakesh Gangwal, ex-CEO of US Airways. A year later, in August 2006, the airline commenced its operations with its first flight from Delhi to Imphal (a city in India). The last to enter the LCC battlefield, IndiGo's future appeared bleak amidst stiffening competition from stronger players. Kushan Mitra, assistant editor, Business Today magazine said, "This was at a time when several players had already entered the segment and a few had even begun experiencing some initial success. Naturally, many people doubted that IndiGo would ever fly"...

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