In it for the long-haul | Outlook Business
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Perspective

In It For The Long-Haul
IndiGo needs a new success formula if it wants to crack long-haul

N Mahalakshmi

Aviation has always been a difficult business with very few players having built a profitable enterprise. Within that, long-haul has been even more complex. So, when an airline such as IndiGo, which has been stupendously successful in the domestic market, says it wants to go long-haul, one can’t help but have mixed feelings. If you have executed a business model to perfection, why stake your core by venturing into something where the success rate is very bleak. That is what history tells us — no successful domestic airline in the world has really made a dent internationally. But then, that is also the spirit of enterprise itself — nothing new will ever be created if you side with history, fearing failure.

Surely, the promoters of IndiGo understand the Herculean challenge long-haul poses. None of the ingredients that made them successful in the domestic market will really work when it comes to long-haul. The tight leash on costs aside, the formula for success in long-haul is entirely different. Knowing this, the first step IndiGo has taken is to bring in a new management team with co-promoter Rakesh Gangwal calling the shots. Thus far, co-promoter Rahul Bhatia has steered the company to dizzying success — with him liaising with the government and his team executing relentlessly on the ground. In this issue’s cover story, deputy editor Krishna Gopalan gives a detailed account of how IndiGo attained cruising altitude and what could determine its success from hereon.  

In other stories, we have an enterprise feature on Bizongo, a start-up that is disrupting the packaging business big-time. Started by three IIT graduates, it has created a platform that brings together manufacturers and buyers of standardised and customised packaging. Keeping up a furious pace of growth, it is among the best-funded B2B start-ups today. 

We also have a market feature on mid-caps that seem like attractive buys. As a segment, small and mid-caps have got really beaten up over the past few months for a variety of reasons, ranging from re-allocation by mutual funds to emerging threats to growth. We have shortlisted stocks whose prices have fallen substantially while their financial performance has remained intact, making the correction a good entry point for investors.

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