After Conquering Indian Skies, Can IndiGo Become A Global Airline?

IndiGo, a domestic budget airline, transported over double the amount of passengers compared to AirAsia, Singapore Airlines, Japan Airlines, or All Nippon Airways last year; however, it remains relatively unknown outside its home country.

According to its new CEO, Pieter Elbers, IndiGo is a highly regarded brand in India, but lacks recognition outside the country as it is relatively unknown and doesn't evoke any positive or negative perception.

Elbers, formerly the CEO of KLM, has joined IndiGo with plans to prioritise international expansion to compete with regional rivals like Air India. This move comes after IndiGo has solely focused on domestic flights, making Elbers a key player in the company's future endeavors.

IndiGo operates Airbus flights to 26 overseas locations and collaborates with Turkish Airlines to serve 30 European cities through a code-sharing deal, allowing both airlines to sell seats on each other's planes, as reported by Asia Nikkei.

IndiGo is preparing to launch flights to Nairobi and Jakarta and is in discussions to establish a code-share agreement to expand its reach to the United States, according to CEO Ronojoy Dutta.

With the delivery of A321XLR aircraft from Airbus, the carrier will be able to fly longer routes, further supporting expansion into Southeast Asia, Northeast Asia and Europe.

IndiGo's CEO, Elbers, promised to prioritize and expand the domestic network stating it as the key aspect of the business. Their objective is to cover all cities with airports.

IndiGo operates flights to 78 Indian cities and transported 69 million passengers locally in 2022, recording a 55 per cent domestic market share in February, twice that of Air India, its chief domestic competitor.

In 2021, IndiGo carried 7.42 million international passengers while Air India transported 10.67 million international passengers.

IndiGo, established in 2006, has succeeded despite harsh conditions in the Indian airline industry with 15 competitors, including Jet Airways and Kingfisher Airlines, closing due to factors such as price wars, low occupancy, and costly fuel.

According to a March report from Jefferies, IndiGo boasts an 84 per cent on-time departure record, surpassing both Southwest Airlines and Ryanair who had rates of 72 per cent and 75.5 per cent respectively.

As competition intensifies in India's aviation industry, IndiGo, a major airline in the country, is aiming for international expansion. India is on track to become the world's third-largest economy by the end of this decade and has already surpassed China in population.

According to the Center for Asia Pacific Aviation, India's domestic airline traffic is expected to rise by nearly 20 per cent to 160 million passengers by March 2024, while international travel could see a 27 per cent surge to 75 million.

For reference, 199 million passengers flew with American Airlines in 2022 and 168 million used Ryan Air.

The Indian government has allocated $11.8 billion towards expanding and upgrading airports, with a target to raise the number of airports from 140 to 220 by 2025.

The government has refused a proposal from the United Arab Emirates to increase the maximum number of seats available to Gulf carriers offering Indian passengers to 116,000 per week from 66,000, with the aim of encouraging Indian airlines to fly more direct international flights instead.

IndiGo is encountering tough competition from Air India, as the latter placed a massive Boeing and Airbus jet order in February, which includes 70 widebody aircraft, showing its interest to operate long-haul flights.

In addition, Akasa Air in India, which began operations recently and scheduled to start international routes this year, announced its plan to acquire a new batch of aircraft, aside from its existing order from Boeing of 72 units. The order is projected to be in the hundreds.

IndiGo is set to increase its fleet to 800 aircraft by 2030, with the delivery of 500 jets underway. The airline is also in discussions for a potential order of 500 more planes, including widebody varieties, according to reports.