Thursday, June 13, 2024

IndiGo: Success Can Be Bittersweet

Bikram Vohra

Bikram Vohra, Consulting Editor

IndiGo Airlines is poised to be on the tip of the spearhead when it comes to the resurgence of the industry. That is an acknowledged fact. The Indian carrier has surpassed all expectations and today enjoys the largest market share at 63.3 percent, followed by Air India and Vistara with 9.8 percent share each. Two months back SpiceJet overtook Akasa and registered a market share of 4.4 percent.

How did Indigo push so far ahead as a low-cost airline and is this embarrassment of riches marked by a firm order of 500 A320s between 2030 and 2035 something that could become dangerously top heavy. It could find that infrastructure and dependency on outside elements like airports authority, MRO services and a search for slots lag woefully behind.

The trick in picking up the dramatic lead was based on five factors. The customer experience was given high priority and stayed at a high-level right from booking and check in to inflight service and reconciliation with luggage at the destination. These facets included comfortable seating, reliable and swift baggage handling, friendly customer service on the ground and easy ticketing. The dedication to on time service and the ability to deliver on that promise was one of the big winners.

Customers felt comfortable with the service quality and the staff was trained to ensure courtesy in its service and the cleanliness and hygiene standards on board the Indigo fleet was exceptional. Let me just add here that I use ‘was’ a little loosely here because Indigo still has a high loyalty factor. It is just a niggling concern that provokes the use of the past.

It was not all cosmetic. Indigo continued to prioritize safety and placed rigorous maintenance standards, ensuring that the carrier invested in state-of-the-art technology. This added to customer trust and the word spread swiftly. But robust management and good planning also contributed to efficient costs. Indigo ‘s top brass had the good sense to put their minds to sensible route planning and were constantly exploring new and lucrative rules both domestic and international. Increasing flight frequencies on popular routes help to enhance connectivity and give the customer multiple options. In those early days pride in the airline was discernible at every level. Sensible management techniques call for a continuous monitoring and optimization of operational costs, aircraft maintenance labour expenses and procurement. All these were done without compromising safety or service quality.

Those early years also saw much attention paid to staff and motivation, and training programmes to ensure a highly skilled and motivated workforce were integral to the Indigo experience.

In an unstable world where the current hotspots could trigger a huge increase in fuel prices one area that every airline has to take seriously is centred around sustainability. This includes investing in fuel-efficient aircraft, exploring alternative fuels, implementing waste management, and recycling programs, and reducing its carbon footprint through various operational measures. Not to do so is to risk the collapse of the working pyramid.

Several well-established airlines have faced financial difficulties or ceased operations even before the Covid collapse. The success or failure of an airline can result from numerous factors, including economic conditions, mismanagement, competition, and unforeseen events.

Pan Am filed for bankruptcy in 1991 due to a combination of financial troubles and increased competition, losing out because it did not factor in future scenarios.

Another iconic carrier, Trans World Airlines ceased operations in 2001 after struggling to compete with other carriers and dealing with rising costs. Mexicana closed and even in its return is a shadow of its original self.

Air Berlin lost out to low-cost carriers and struggled with financial losses but then there was a large gap between the two options in fiscal terms.

Airlines like Monarch, Avianca Brazil, Jet also fell by the wayside.

In aviation market dynamics, economic management, operational efficiency, and strategic decisions all play significant roles in an airline’s future.

All the plus points that have made IndiGo a formidable carrier with a perfect record are exactly what could become a drag on the carrier as it becomes increasingly difficult to maintain that level of smooth efficiency when growth is exponential.

We have seen airlines come a cropper as the minute details start losing out.

Obviously, safety is paramount, and IndiGo has set the standard high with a perfect record. But in 2023 there have been several in-flight incidents including engine issues, hydraulic failure, smoke on the flight deck and multiple emergency landings. To put things in perspective while each incident is worrying per se in aviation terms these do not ipso facto compromise safety because the appropriate corrective action is taken. But as one grows, and turnaround times are saved and Go items or the Minimum Equipment list gains credence these incidents will become more ominous.

The second area of vital importance is passenger comfort and perception of the carrier’s comfort zone. Not so long ago IndiGo cabin crew and ground staff took innate pride in their jobs and were unquestionably ambassadors for their airline. Although the one-off incident in May 2022 where a child with special needs was disembarked because he was seen as a threat is not indicative of a specific trend the dilution in staff courtesies sparked by increasing numbers could turn noticeable. There is now a certain asperity and impatience. On three consecutive flights I took and observed row thirteen on an A320 which is the emergency exit row. It did not matter who was sitting there or could respond to a midair crisis. Ergo on Sept 21, 2023, a passenger tried to open that very door midair. Again, as training periods turn into cram courses to feed the demand, quality can suffer.

Integral to passenger comfort is ticket pricing. IndiGo no longer enjoys an edge here and is often spiking higher than full-service airlines. There are days when it is more expensive on the milk and honey Dubai-Delhi routes than Air India and Emirates. The whole idea of an ultra-low-cost no-frills option is defeated. Ground staff, too, have become a little more impatient and rushed. There was a time when the ubiquitous blue uniform was in sight when reconciling with baggage at the carousel. No longer.

Success comes with its own tax. Becoming too large to manage can indeed be a challenge for any organisation, including airlines like IndiGo. It needs to be cautious about expanding its operations at a pace that exceeds its ability to adequately manage and support the infrastructure required.

A robust infrastructure planning strategy must consider its growth projections. This includes assessing the capacity requirements for airports, terminals, parking areas, and maintenance facilities. Collaborating with airport authorities and other stakeholders can help identify potential infrastructure bottlenecks should be integrated into any plan for future expansion.

Utilizing advanced technology solutions can help IndiGo manage its operations more efficiently. Implementing robust airport management systems, digital platforms for passenger services, and automated processes can streamline operations, reduce congestion, and enhance overall infrastructure utilization. By adopting a proactive and strategic approach to infrastructure planning, investing in technology, optimizing operations, and fostering collaboration, IndiGo can effectively manage the challenges associated with its growth and prevent lagging infrastructure from becoming a significant obstacle to its success.

 Several well-established airlines have faced financial difficulties or ceased operations even before the Covid collapse. The success or failure of an airline can result from several factors, including economic conditions, mismanagement, competition, and unforeseen events.

In aviation market dynamics, economic management, operational efficiency, and strategic decisions all play significant roles in an airline’s future. At present IndiGo does rule the roost and there is no reason it should not continue to do so. Except that if it did notice a little unravelling at the edges in any section it would do well to stitch it up fast

Bikram Vohra is the Consulting Editor of Indian Aerospace & Defence

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