Cheap flights to profitability: IndiGo shows the way

Indigo was not the first airline to operate the cheap flights on the low-cost business model. It never figured in the calculations of the experts as it was considered too insignificant a player as compared with the heavy-weight full service carriers, the largest of which was a government owned airline. And, even the operating conditions were also not easy. The aviation environment was not particularly friendly to the players and was rather notorious for sounding the death knell of the airlines. Despite all these challenges, the one airline, which banked solely on its performance, was able to turn the tides moving against it. IndiGo, a value-based LCC, became a market leader in a very short span, capturing the largest market share on the domestic turf by beating the airlines. It reported profits in the last year and this year too, it is poised to set what may be called a record of sorts by reporting profits for a second time in a row.

True, it began by providing the lowest air fare to the people and increased the prices when the demand increased. While it has operated on a business model which severely restricts its number of services being offered to the customers, the passengers are increasing buying tickets online and at its counters. It shows that for the short haul flights, the passengers are willing to hold to their hunger and instead, take the service of the airline which is far more punctual than the others. With one of the best on-time records, the most crucial of services which the passengers expect from any airline, it is not surprising that to find good seat load factor. Good seat factor means that the IndiGo airplanes fly with almost full levels of occupancy. Further, unlike some other LCCs of the world which charge for almost anything that you would be carrying or will ask for during the course of flight in return for the lowest air fare, IndiGo is more customer oriented as it has some free baggage allowance to offer along with the mileage program for corporate bodies.

IndiGo, with its finely balanced offerings to customers and operational efficiency requirements have shown the way to profitability for airlines operating from a supposedly airline-unfriendly environment.

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