By Bikram Vohra
IndiGo is a bit like the curate’s egg…it is good and bad in parts. The good still outweighs the bad so to speak but if it continues to gild the lily with charges that could be interpreted as gouging on extras, the vat of goodwill might begin to dry up a bit with the public. For now, it’s clever, almost fey and cheery fiscal camouflage for everything except perhaps the use of onboard toilets is managing to keep the bottom line buoyant. The 13 percent surge in traffic this year accounts for an uplift that slices past the annoyance of having to cough up extra for what should be an integral part of the low-cost allure. If that post-COVID surge slows down, then the sense of upset over increasing even base ticket price to coincide with the year’s high-intensity holiday periods will backfire.
That rising resentment is kept in check currently largely because IndiGo is a monolith with 300 aircraft operational and there is little competition at the present. To quote: With our fleet of over 360 aircraft, we operate well over 2,000 daily flights, connecting over 110+ destinations (of which 33 are international), welcoming 100+ million customers on board last year. Unquote.
The absence of competition also heightens that aspect and allows the public to surrender to the pressure of the ticket gouging reluctantly. It is a dangerous sport when the current attitude is camouflaged as marketing practice in that seasonal hikes are seen as acceptable. Fair enough but when the base price is jacked to 100 percent then peril could well knock on the door. Many a carrier has come a cropper because it thought the good streak was forever. It is common knowledge that all aircraft have a break-even uplift depending on the fuel consumption rate and the number of occupied seats on a flight. The load factor assessment is not rocket science. In an A 320 give or take fixed costs and variables break even should be about 131 out of 180 seats. Consequently, the periodic step up in charges is exploitative. Of course, the airline currently is cosseted by some very tangible plus points. While it’s true that IndiGo, like many other airlines, does charge for extras such as meals, seat selection, and baggage, its success is not solely dependent on this revenue model.
From the very start, it established a strong brand image and marketing strategy. That still endures. The airline carefully positioned itself as a no-frills carrier that offers good value for money. This was appealing to cost-conscious travelers in the Indian market. IndiGo also invested in building a strong online presence and customer service infrastructure, making it visibly easy for passengers to book flights and manage their travel experience.
One other key factor in IndiGo’s success is its strong focus on operational efficiency. The airline has a reputation for punctuality and reliability, which has helped it build customer loyalty and attract repeat business. IndiGo has a young and fuel-efficient fleet of aircraft, which helps keep operating costs low and offers competitive fares to passengers. It is efficient and clean and neat in its presentation, so these elements eliminate much of the angst. The mistake it makes is in believing things cannot change. There is writing on the wall. And in recent times it has been in multiple controversies with irate passengers.
While it has also come under pressure thanks to the fallout from the Pratt and Whitney issue of powdered metals in the 1100G power plant it would be well advised to make an honest self-appraisal of how it dropped almost 3 percent of its 64.3 percent market share in six months. Was it just the grounding of a peak 70 aircraft alone or is there a simmering sense of frosty alienation in those who need to fly?
In recent times its cold almost distant and antiseptic attitude towards the end user across the board has been increasingly noticeable and passenger complaints ranging from incidents of apron dining to slapping and verbal spats have been on the increase.
Where it wins is in how it has focused on connecting major cities and tourist destinations across the country, as well as expanding its international presence. By offering this wide range of destinations and at times competitive fares, IndiGo has been able to attract a large customer base and maintain its pole position. The route map is extensive.
The airline has a strong focus on punctuality, ensuring that flights depart and arrive on schedule. This reliability has helped build trust among passengers and contributes to a positive Airbus A320neo, which helps reduce fuel consumption and operating costs. By streamlining operations, the airline can improve efficiency, reduce costs, and enhance overall performance.
By prioritizing employee training, the airline can maintain operational efficiency and uphold standards. IndiGo must be said to leverage technology to enhance operational efficiency across various functions, including flight scheduling, maintenance, and customer service.
So while it is still unquestionably the spine of Indian civil aviation there are conflicting assessments of its financial standing. Even if the rug has not yet been pulled in any dramatic fashion its profitability bounces up and down. There is a school of thought that believes the failure to factor in the impact of inflation will bite it in the behind.
And what might expedite the drop is the public’s growing disaffection with some of the practices that add sharp quills to the no-frills premise.
Bikram Vohra is the Consulting Editor of Indian Aerospace & Defence.