A review by a parliamentary standing committee deems Indigo to be the worst performing carrier for customers.
Yet, the fact that Indigo remains the formidable market leader is a critical insight into the peculiar dynamics of India’s aviation market. As rivals struggled, the market leader Indigo’s share has gone only one way this year – up. In the quarter ending September 2018, the company’s market share had reached 42.4% from 40.7% in the previous quarter. This is in contrast to rivals like Jet Airways (13.8% as compared to 13.9%) and SpiceJet (12.2% as compared to 12.3%) who saw their market shares fall.
But here’s the catch. The Parliamentary Standing Committee on Transport, Tourism and Culture headed by TMC MP Derek O’ Brien has rated Indigo as the worst performing carrier for consumers. Derek stated at a press conference while announcing the committee’s findings on the report:
“Our committee is very clear that the worst performing airline for consumers is IndiGo. All 30 members agreed on this. IndiGo has not responded despite many complaints. The way they behave with consumers and charge for just one kg or two kg overweight of air baggage.”
He went on to add that every member of the panel was ‘disgusted with the way some private airlines are operating’ but Indigo took the cake. He called it discourteous and rigid, and criticised it for charging customers that had even 1-2kg of extra baggage. Derek also clarified that these were views of all committee members across party lines.
On the other hand, they rated national carrier Air India as having the best luggage policy. Derek said the baggage allowance of all other airlines needs to be enhanced and added that the fares are also too high. Indigo’s rating would bring to mind the customer manhandling incident that had given the company a plethora of bad press in October 2017.
The airline has been deemed a master of operational excellence, even as it surprised investors with a loss of US$ 90 million in the quarter ending September, its first loss since going public three years ago. It has leveraged its strong balance sheet to continue with aggressive capacity expansion and has a reputation for punctuality, standardised service delivery and low fares.
Despite the criticism of the Parliamentary Committee on Indigo’s customer policies, the market leader has only strengthened its position in the market this year. This perspective is important for investors in the Indian aviation market, where several airlines have gone bust over the last 10-15 years. Customers seem to be willing to compromise on service parameters if they are getting a good price for the same. The no-frills, high operational efficiency model of Indigo seems to be the one that has really worked, while the others have failed.