By DR. PAVAN SONI,
Low-cost airlines are notorious to operate, let alone keeping profitable in a very value-for-money conscious market, such as India. With the departure of Air Deccan, Sahara Airlines, Kingfisher Airlines, and more recently, Jet Airways, it’s evident that the Indian market is punishing. However, IndiGo has not only maintained a leadership position in terms of market share but also done that profitably.
The story of IndiGo is paradoxical — to maintain differentiation at low cost, something that goes against the grain of most management theories. In this case, we delve into some of the customer-centric practices at the company and how it has managed to maintain high operational efficiencies through its people practices and the adoption of technology. It makes for a very interesting study of how design thinking is practiced at scale and why discipline is the key to sustained innovation.
The case discusses four critical aspects of the company: 1) Continuous innovation for customer convenience, 2) Building a strong consumer brand, 3) Adopting technology alongside human-touch, and 4) Unparalleled focus on employee training and engagement.
About IndiGo
IndiGo is India’s leading low-cost carrier. The airline was founded by Rahul Bhatia of InterGlobe Enterprises and Rakesh Gangwal in August 2006. With a market share of 53.9% as of December 2020, IndiGo is India’s largest passenger airline. The company operates 1500 daily flights with its fleet of 283 aircraft. The airline operates across 87 destinations, with 63 domestic and 24 international locations. The fleet of 283 aircraft including 120 new generations A320 NEOs, 108 A320 CEOs, 25 ATRs, and 30 A321 NEO.
In October 2015, IndiGo went for an IPO and as of February 2021 has a market capitalization of Rs. 634,660 million.
For the financial year ending March 2020, the company secured revenues of Rs. 314,470.59 million from passenger tickets, Rs. 39,458.47 million from ancillary products and services, and Rs. 15,355.09 million from other incomes. The company reported a net loss of Rs. 2,336.78 million in FY 2020 against a net profit of Rs. 1,572.47 million in FY 2019. It is the first time since 2010 that the company has made a loss.
It is a reflection of the difficult times the industry is going through owing to the COVID-19 pandemic.
By March 2020, the company has 27,182 employees including 4,017 pilots and 6,573 cabin crew. The company has the distinction of having one of the highest numbers of women pilots globally (amongst carriers with over 100 pilots- report by the International Society of Women Airline Pilots).
The core value propositions of IndiGo are: offering low fares, being on-time, and delivering a courteous and hassle-free experience. However, the airline has become synonymous with on-time performance in the Indian market.
For its customer engagement practices and operational excellence, IndiGo has the distinction of being identified by one of the world’s most innovative companies by the Fast Company in 2015. Number 9 on the list, the airline was admired for “making it feel good to fly cheap”.
Next, we delve into some of the specific practices at the company that has made IndiGo one of India’s most preferred carrier.
Continuous innovation for customer convenience
IndiGo is known for its innovations in customer convenience and comfort. Starting with one of the most clutter-free websites in the industry to self-check-in kiosks, a sleek boarding pass, step-less ramps, intuitive food menu, and in-flight garbage collection, the company has incorporated several means to delight the customer, while keeping its operational efficiencies intact.
One of the hallmarks of customer experience (CX) and user interface (UI) is minimalism. As compared to most other low-cost airlines in India, IndiGo has the most clutter-free interface.
By being one of the first to introduce customer-assisted garbage collection, the airline almost set a trend for keeping flights clean.
One of the most distinctive efforts at IndiGo has been around diversity and inclusion, especially with a focus on passengers with disabilities. IndiGo maintains a Web Content Accessibility Guidelines (WCAG) certified website that enables passengers with disabilities to access the website with ease and comfort.
In 2014, the company pioneered the adoption of stairlifts and later step-less boarding ramp that allows wheelchairs and stretchers to be taken right into the aircraft effortlessly.
The ramps have been ubiquitous at airports across India wherever IndiGo operates. Its buses are equipped with ‘auto step’ to assist senior citizens and passengers with disabilities.
Though initially meant for passengers with disabilities, features such as step-less boarding ramps and auto-steps in buses have increased the convenience for all the passengers and have resulted in quicker turn-around time for the carrer.
In January 2013, IndiGo was the first Indian carrier to introduce its menu and Safety Briefing Card printed in braille.
For the company’s efforts in building a disabled-friendly infrastructure and environment, in August 2017 IndiGo was given the Disability Matters Award — Asia Pacific 2017 by Springboard Consulting LLC. It was the only Indian airline to have been conferred with the Disability Matters Award for the third time after 2015 for making air travel hassle-free and convenient for passengers with reduced mobility. A year earlier, the airline bagged the NCPEDP-Mphasis Universal Design Award for features like special shifting board, stairlift, disabled-friendly buses, and ramps.
The most recent advent has been IngiGo’s partnership with car rental company Urban Drive to help its passengers book self-driven and chauffeur driver services across 60 cities in India. The customers would be able to book a cab while booking their tickets at the IndiGo portal, starting December 2020.
In 2019, for the tenth year in a row, IndiGo was recognized with ‘The Best LowCost Airline in Central Asia and India’ at the SKYTRAX World Airline Awards. The world’s largest airline passenger satisfaction survey captures data on 41 key performance indicators of airline front-line product and service and sees passengers participating from over 160 countries.
Building a strong consumer brand
Through consistency in creative advertising and sticking to its knitting, IndiGo has managed to create a distinctive brand identity. In fact, the company has its own font, IndiGo font.
One of the brand promises of IndiGo is “on-time”. Though the airlines hasn’t always been on top of the chart among Indian players when it comes to on-time performance, the perception remains.
For its on-time performance, in 2018, IndiGo was ranked 4th most punctual airline globally in the mega airline category by OAG in its Annual review — Punctuality League 2018. IndiGo was the only Indian operator bestowed with this unique distinction.
In fact, it has claimed on-time with ‘IndiGo Standard Time’ as a slogan. It’s hard to not almost get hammered by claims of on-time on-board an IndiGo flight. The company has managed to secure a distinctive identify with its thrust on on-time performance.
Every time an aircraft takes off, the flight attendant would announce, “the flight is taking off at xxxx hrs, IndiGo Standard Time”. In case it’s taken off or landed before time, they won’t miss making a point of it.
In May 2010, IndiGo became India’s first low-cost airline to launch a TV commercial. Dubbed as ‘On-time is a wonderful thing’, the catchy ad reinformed the brand promise of ‘on-time, every time.’ The ad was as fresh as it was relevant, and the voice-over concludes: “When we get our work done on time we become the world’s most powerful economy on time; on time is a wonderful thing.” The ad helped reinforce the brand promise.
Another eye-catching branding is that of the in-flight meals. Dubbed as ‘6E Tiffin’, these food items are specially packed and designed keeping in mind the brand’s appeal for both leisure and business travelers.
Creative announcement of destination added to its international flights has been another point of attraction. It shows the funny side of the brand.
The in-flight magazine, ‘Hello 6E’ is another avenue for the brand to connect with the audience, creatively.
Even though the airline has no loyalty program, its popularity is unrelenting. In April 2019, IndiGo got awarded with the title ‘Best-low-cost-Airlines Asia’ in TripAdvisor’s annual Travellers’ Choice Airline Awards. It was the third consecutive year that the airline bagged the prestigious award.
In the wake of the COVID-19 pandemic, IndiGo was ranked #1 by the Safe Travel Barometer with a rating of 4.2 out of 5 as the safest airline in India.
Adopting technology alongside human-touch
Low-cost airlines, the world over, adopt technology to lower human errors and reduce turnaround time while keeping the cost of operations as low as possible. IndiGo too has adopted technology appropriately.
The airline was one of the first and largest adopters of self-service kiosks at major airports.
One of the features of IndiGo is its proprietary Aircraft Communications Addressing and Reporting System (ACARS). ACARS ensures that every time a flight takes off or lands an automatic message is trigged from the aircraft to IndiGo’s operations control center (OCC) and the timings get recorded in the software. These timings are recorded ‘real-time’, automatically through ACARS, eliminating any human intervention.
On how systems such as ACARS help the airline maintain its on-time performance, one of the senior pilots at the company notes, “IndiGo has invested a lot in technology and it is paying dividends. Since it is not a full-service carrier, not much cleaning is required. There are no trays to be collected. So even if there is a late arrival, the ground staff is able to turn around the aircraft in 15 minutes. Also, there is a stress on timely departures and it is monitored on a daily basis.”
The ground-staff uses a hand-held device to scan the boarding pass as you get onto the flight. Earlier the practice was to tear-off a counterfoil from the ticket and then count it later. The scanning method lowers human errors and speeds up the process and certainly cuts down on paper waste.
As early as 2015, IndiGo launched a chat feature for the customers. ‘6E Chat’ enables members to chat online with the airline staff at its call center and helps get the real-time update.
In 2020, IndiGo rolled out a large scale adoption of AI-enabled WhatsApp service, capable of catering to 10 Lakh+ users simultaneously. It enables web check-in, instant response to queries, receipt of booking-related notifications, and direct booking over WhatsApp.
Specifically for this feature, in February 2021, IndiGo bagged the Gold award for Contact Center of the year and Silver for Best use of Technology in customer service at the 15th edition of Stevie Awards.
In February 2020, IngiGo launched the Hindi version of its website and is on the way to getting its website accessible in all major Indian languages.
Adoption of technology helps the carrier maintain high operational efficiencies. In 2016 and 2017, IndiGo was identified for its ‘Best Operational Excellence’ by Airbus, outperforming 46 airlines of international repute. The selection criteria were based on two years of data on daily utilization rate, technical reliability, and the number of delays caused due to flights for operational reasons.
Both a disciplined approach to managing variable cost and adoption of technology wherever possible to minimize errors and increase efficiency has enabled the airline to remain profitable for the longest time in the Indian market.
Unparalleled focus on employee training and engagement
Behind the scenes, the company maintains a professional work culture and a very high focus on employee training. It has one of the industry’s largest training facilities in Gurgaon— a 75,000 square feet state-of-the-art learning academy named ‘ifly’.
The training programs at the academy are ‘inside-out’, the departments being encouraged to state their improvement areas resulting in the development of customized training modules. The departments trained at ‘ifly’ comprise Administration, AO & CS, ifly, Commercial, Engineering, Finance, Flight Operations, Flight Safety, Human Resources, Inflight Services, Information Technology, Operations Control Center, Cargo, Corporate Affairs, Legal and Emergency Response.
IndiGo’s Learning Academy — ifly — has over 100 instructors who regularly conduct workshops for its 24000+ employees. The E-Learning duration at IndiGo is 97 days, as the longest cabin crew training course in the world. In the financial year 2019–20 464 pilots, 1,384 cabin crew, 657 engineers, and 3,007 airports, customer service, and security staff graduated from ifly.
Apart from having pilot and crew training facilities in Gurgaon and Bangalore, IndiGo continuously partners with learning training institutes around the world to source talent. In April 2017, they inked a partnership with Australia-based Flight Training Adelaide (FTA) to provide training to ab initio pilot cadets at their flight school at Parafield Airport in South Australia. On completion of the training program, successful candidates will achieve a dual CASA and Indian DGCA license and would join IndiGo as Junior First Officer (JFO).
In 2020, TISS LeapVault Chief Learning Officer (CLO) Awards 2020 recognized IndiGo as a leader in four award categories: 1) Gold for ‘Safety Training Adaptation to the new normal’, 2) Gold for ‘Putting the Customer First’ for AOCS managers and frontline, 3) Gold for ‘Customer Service for Restart of Operations’, and 4) Silver for ‘First Aid Program to handle common medical emergencies’. The airline was awarded in 2017, 2018, and 2019.
For its people practices, the company is recognized as ‘Great Place to Work for in India’ for 8 years in a row (2008- 2015). It was named Aon’s Best Employer for the years 2016 and 2017.
As it turns out, that it’s only through employee-centricity that customer-centricity could be achieved. And IndiGo is a telling example of how building an aspirational brand for employees and customers can offer long-term dividends and adoption of appropriate technology could trim down the cost. All this also needs empowerment at the grassroots level such that ideas for customer convenience could emerge from all across.
In summary
The case of IndiGo is that of modern India. It has the elements of aspiration, audacity, fun, technology savviness, and customer orientation, all packed in a disciplined manner.
With the adoption of appropriate technologies wherever possible such as hand-held scanners, self-service kiosks, ACARS and chat features, the airline has kept customer proximity and efficiency focus. With minimalism in its procedures, website design, layout, and boarding pass, it has kept the look and feel clutter-free. The branding, with fun and purpose, has kept the company relevant to business and leisure travelers alike and the array of awards speak for the commitment.
More such case studies and insights on Design Thinking are available in my book, Design Your Thinking, published by Penguin Random House in 2020. Hope you draw some useful insights for your adventures.
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