"While starting up IndiGo, the main focus for IndiGo was to know their one big objective," Ghosh told CNBC-TV18. IndiGo was the last airline to start, and by the time it started, all the pilots, engineers and parking base were gone. Indigo had ordered 100 planes and it didn’t know where to park them. The perception for a low fare airline has often been that low cost equates to low quality. When people came off a low fare carrier, they would discretely take their bag tags off because they didn’t want to say which airline they flew, pointed out Ghosh. "Our one big objective was that we didn’t want low cost to be low quality," he added.
From 2006, the airline business started to boom, and then, 2009 arrived and turned out to be the worst year for airline business. All the passengers had disappeared and people cried foul. At this time, Ghosh said that he had to be constantly agile, change the product and accelerate fleet coming in. While the entire industry was screaming overcapacity, IndiGo started adding planes. In the same year, the overall market dipped by 5% IndiGo grew by 46% and the next year, it grew by another 39%. This year, IndiGo expects to grow by another 50%. "We needed to do something differently without losing the track of our dream, and yet be agile," he indicated. Initially when IndiGo started, it began losing focus because everybody around was throwing valets, carpets and free meals and chocolate mousses, said Ghosh. We thought of a typical travel plan. We thought of three simple things like on time hassle free low fares and that business model worked for Indigo.
"Our problem was not enough to be competitive or better than the next loser. So, we ordered 100 planes in 2005," he told CNBC-TV18. When IndiGo ordered 100 planes, the media didn’t take it seriously and considered it as a marketing gimmick as there wasn’t any place to park the planes. People thought that IndiGo would become a trading company and would sell the bought planes.
India was then one of the most underpenetrated aircraft markets in the world, so IndiGo spread it over a period of ten years. On October 10, IndiGo would get a delivery of its 50th plane. IndiGo is now halfway through the order and has been in the business only for five years. The 100th aircraft would arrive in 2015. In 2015, when IndiGo has eaten up its first 100 planes, what would be the next step? So, the airline ordered another 180 planes and had to time it accordingly.
The industry always would need planes, but getting more of the same planes with the current technology would have put IndiGo at a comparative disadvantage. On December 1 last year, Airbus announced its new plane called the NEO – (it is a 320 with a different engine and winglets). Immediately, we have a plane that burns almost up to less than 15% less fuel than our current planes. And those planes would arrive from 2015 onwards, the same time when the first 100 planes come to an end.
This is like a marathon and one has to keep the long-term vision in mind, he indicated. "The only way one can make it to the finishing line is not being of a consistent speed, but knowing when to speedup and conserve energy," he concluded.
Source: Moneycontrol (visit - http://www.airlinesindigo.in)
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