By- Arushma Singh, PGDM- R&BA (2019-2021)
Indigo, which started its operations with one airplane in 2006, has reached the point where it has the largest fleet size in the country with the highest passenger carried, it had achieved this largest fleet in 2012, by following various strategies, the most prominent one being Network Mirroring.
The first time this company came into focus was when Kingfisher had to shut down its prime-time operating flight between Delhi-Kolkata, and Indigo pushed one of its flight in the section thus gaining the reputation of becoming one of the most “beast” airline in the country. What with its chasing every competition there was in every sector, every flight, every route, it is announcing new stations almost every month?
What is network mirroring? A strategy followed by airlines to curb competition, what the airlines do is that it follows other airlines to the same routes, sectors and at the same time and near to the inaugural date of the other airline’s flight. How this helps the second airline is that the route that the first airline thought to be a monopolistic route, thinking no one else is flying that route, a second airline follows, the game plan of the first airline of maintaining a monopolistic market for this route goes amiss. This strategy is followed aggressively by Indigo
Last year, after few weeks of GoAir announcing its first international flights to Phuket and Male, Indigo announced its own two flights to these destinations, at the same time and almost the same inaugural dates. Indigo being a low-cost operating airline and one of the few airlines in the country at the moment with large cash reserves can afford to follow this strategy.
Indigo being a low-cost airline only operates with one class of seats on the airplane. It only has the economy class and offer no complimentary meals. Thus, reducing the cost of the airline. Other than this the airline maintains a very young fleet of aircraft with the average age being 6 years. It maintains this by selling and leasing back airplanes, this way the company does not even have to do regular checks or spend much on the maintenance cost of the aircraft. Hence, leading to low costs, which the airline requires to maintain profit keeping in mind the low price of Indigo flight tickets. This plan of selling and leasing back airplanes has led to Indigo’s largest fleet in the country, and with fleet of such a size, Indigo does not have to think much before processing with its Network Mirroring since it does not hurt the airline much, if it puts one or two aircrafts in the newly acquired routes.
Indigo has been chasing competition using this strategy for a long time, one of the examples being when AirAsia announced one of its first flights in India between Chandigarh and Bengaluru, which was earlier not connected by a non-stop flight, Indigo launched its flight on the same route. The low per-unit cost of the airline helps Indigo in maintaining profits while following this strategy of Network Mirroring. There are various other examples, of how Indigo has grown and has almost pushed Jet Airways, once the top airline of the country out of various markets.
Networking Mirroring has worked wonders for Indigo, which started as a small private company with a small fleet size, its various strategies of maintaining a young fleet, having low operating costs, and network mirroring have led to profitability and immense growth of the airline.
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