At IndiGo, the fundamental principle that governs the business model is low-cost leadership. The airline is in a constant endeavour to lower costs and provide affordable, on-time, hassle-free travel experiences to its customers whilst simultaneously aiming for growth. Vinay Malhotra, Head-Global Sales, IndiGo, conveys that they have defined three strategic pillars of reassure, develop, and create to support their growth plans as they are looking to double in size and scale by the end of this decade.
– Prashant Nayak
The growth of the aviation market in India is vigorous and back to pre-COVID levels presenting IndiGo with the opportunity to grow and flourish both operationally and financially. In the previous quarter, robust demand on account of the peak travel season was reckoned as the reason behind the surge in their topline growth. Looking ahead, with the market forces at play and an ongoing strong travel demand trend that is only expected to grow, the airline continues to add capacity and cater to its aim of providing hassle-free services and affordable travel experiences.
IndiGo is India’s largest passenger airline with a domestic market share of 57.5 per cent (as of April 2023). The airline has deployed more capacity than in the pre-pandemic period and is now operating over 1800 daily flights versus 1600 daily flights before the pandemic. “We continue to see robust growth across the network. We have also witnessed a handsome return of demand for international destinations in the last few months and have introduced connectivity to Europe via Istanbul, through our codeshare agreement with Turkish Airlines. We will be concluding FY23 on the higher side of the range of the previously guided capacity estimates,” asserts Vinay.
Currently IndiGo has two B777s on temporary damp leases for Delhi-Istanbul and Mumbai- Istanbul sectors. They have witnessed an encouraging volume on these routes, which has instilled confidence to deploy these widebodies. It also helps in feeding traffic to the 33 connecting destinations across Europe and four destinations in the US. They are deploying adequate capacity through alternate sources including wet leasing and lease extensions.
IndiGo has defined three strategic pillars of reassure, develop, and create, to build and support its growth plans. Under the reassure pillar, IndiGo will focus on the basics that have made the LCC successful: on-time performance, courteous and hassle-free service, affordable fares, and an extensive network. The development pillar is key to the LCC’s growth plans, in which it is developing and aligning its people, processes, and technology in line with the growing size and scale of the company. The third pillar, Create, targets the next phase of growth, strengthening the domestic network and growing its international operations.
To enhance international connections, IndiGo also added codeshares for connectivity across multiple continents. They currently have codeshares with Turkish Airways, Qatar Airways, American Airlines, KLM-Air France, Qantas, Jetstar, and Virgin Atlantic.
Globally, the aviation industry continues to face significant supply chain disruptions. However, IndiGo’s immediate priority is to deploy adequate capacity to serve its customers. To address pressing travel demand, they are in talks with the OEMs to support with swift replacement of parts for aircraft to bring them back into operation. Vinay adds, “Whilst the supply of spare engines is slower than required, we continue to receive our new aircraft and are implementing measures to minimise the economic impact. These challenges have not hindered our growth, and we remain optimistic about market opportunities, continuing to expand to new geographies in the future.”
IndiGo recently placed a firm order for 500 Airbus, A320 Family aircraft and has previous orders of 480 aircraft which are to be delivered between now and the end of this decade. With this additional firm order of 500 aircraft for 2030-2035, IndiGo’s order book has almost 1000 aircraft to be delivered, steadily spread over the next decade. The IndiGo order book comprises a mix of A320NEO, A321NEO, and A321XLR aircraft. “This 500 aircraft order is not only IndiGo’s largest order but also the largest-ever single aircraft purchase by any airline with Airbus. Our pending order book, structural cost advantages, and our long-term relationships with our supply chain partners are our key assets,” states Vinay.
With an average of one complaint per lakh passengers, Indigo has maintained one of the lowest complaint rates in India. Vinay shares, “Our complaint rate today, as DGCA data reveals, is even better than pre-COVID times. Whilst remaining conscious of the needs of our customers, it is always our constant endeavour to provide a courteous and hassle-free experience to all, taking corrective measures where necessary.”
Currently, IndiGo operates over 300 aircraft and will be adding more by the end of 2023. IndiGo is also expecting to start receiving the Airbus A321XLR towards the end of 2024 or early 2025.
