Chart of the day: Why IndiGo succeeds where Kingfisher fails

Riken Mehta, Shaheen Mansuri, Sagar Salvi
Moneycontrol.com

As Kingfisher Airlines ‘ troubles mount, its rivals have a cause to cheer as they begin to gain market share. The airline, which is now operating only a fourth of its 64-aircraft fleet, has allowed domestic carriers like IndiGo to gain maximum, contrary to the market belief that Jet Airways will gain maximum from KFA’s debacle which started late last year.

Even as the rest of the sector fights the battle for survival, low cost carrier IndiGo Airlines improved its market share to 24.9% in the month of May.

The aviation industry is facing a loss of around Rs.7,700 crore in the year ending March, as per the consulting firm Centre for Asia Pacific Aviation (CAPA).

IndiGo started life as a low-cost carrier and has stayed there firmly, sticking to its business model even in the worst economic crises, a move that has paid off very well.

Problems at Kingfisher Airlines and Air India too have contributed to its expanded market share. Combined market share of Jet and its subsidiary JetLite has been steady at slightly around 28% in the past one year. AI’s share has risen slightly to 16%, as have been those of low fare warriors SpiceJet and GoAir.

Why IndiGo succeeds where others fail

*IndiGo utilizes its aircraft for 16 hours in a day which is considered the highest in the industry, hence can ferry more passengers (on an average its passenger loads have been around  90% in the past one year.)

*Being no-frills is an added advantage for the airline as it takes lesser turn-around time then full service carriers which cater food on-board.

*Highest on-time performance in the past one year with no record of either pilot strike or flight cancellations, it now commands strong passenger loyalty.

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