IndiGo Wants To Be Everything To Everyone, All At Once
InterGlobe Aviation was clearly not content with catering to the regional international traffic from India, so it threw its hat into the ring for long-haul traffic.
When IndiGo launched operations in 2006, the airline had an iron-clad focus on being a single-class carrier offering point-to-point flights. The rationale behind this was to keep the aircraft fleet simple and costs low.
India's largest carrier by fleet size and domestic market share has taken many turns from that keep-it-simple philosophy to get where it is today: an airline with 367 aircraft that flew over 106 million passengers in 366 days — between April 2023 and March 2024. To get here, it dropped the philosophy of operating only a single plane type — adding the ATR turboprops to its fleet in 2017 and got into connecting traffic, where passengers travel on more than one flight to reach their destination. The airline also got into codeshares with other airlines, allowing it to hand over its passengers to other airlines, such as Turkish and Qantas at Istanbul or Singapore for further flights.
But what it holds in the future is even bigger. IndiGo still has around 950 Airbus narrowbody jets on order (A320/A321neo), which will be delivered to them through 2035. The airline also went ahead and ordered 30 Airbus A350-900 aircraft this year, which are widebody aircraft that can fly from India non-stop to North America on one side and Japan on the other.
Everything, Everywhere, All At Once
To say that IndiGo's new ambition is borne from the title of the movie of the name in 2022 is going to sound absurd, but IndiGo's new strategy also came into existence in 2022. The airline already commanded the lion’s share of India’s domestic traffic and needed to think of newer ways to keep its expansion ongoing. Air India was privatised, and it was playing out its own strategy deck at the time, wanting more of the domestic pie while keeping the lion’s share of the international traffic from India.
IndiGo, clearly, was not content with catering to the regional international traffic from India, so it threw its hat into the ring for long-haul traffic with the order of the A350 aircraft, which would allow for flights to the US, Australia and other distant destinations. This speaks to the size of its ambition of wanting to be a key international player from India. The airline already has the A321XLR on order, a narrowbody aircraft that will come to market shortly and allow for flights from India to Europe.
IndiGo has also changed its approach to a loyalty programme. The airline announced last year that it is working on one. Earlier, IndiGo considered it a frill that was not needed. The airline is also exploring the idea of adding in-flight entertainment to its aircraft.
IndiGo Will Launch New Business-Class Product
Everyone guessed that IndiGo would perhaps launch a premium product in front of the aircraft. But it was all talked about for the airline's international operations, where the flights are longer, and people are willing to pay for the product. However, on an investor conference call, IndiGo's Chief Executive Officer, Pieter Elbers, announced that IndiGo will also launch a "tailor-made" business-class product for domestic routes in India.
While he did not reveal the details, promising they would be available in August 2024, the statement stated that the business-class proposition will be route-specific to India's busiest and business routes. That means a Mumbai—Delhi—Mumbai is a yes, but an Amritsar—Delhi—Amritsar might not qualify.
In a TV interview with NDTV after the investor call, he asked everyone to join the clues to see the big picture. The big picture is a shift in the business model, which will converge with the business model of Air India Group.
Air India And IndiGo's Business Models Converge
Air India has a similar thought process to IndiGo, and so have been Kingfisher and Jet Airways before them. The airlines realise that some routes need a business-class cabin and a full-service — lounge, meals on board, priority boarding and priority baggage delivery among other features.
Other routes don't have the potential to pay for business-class travel, so airlines would rather have all the seats configured in economy only. This was the concept with Kingfisher Red (erstwhile Air Deccan) and Jet Konnect. Even now, Vistara has 10 aircraft configured in a full-economy configuration, and Air India has many such aircraft, too.
Air India, though, also has a subsidiary, Air India Express, a no-frills carrier. Air India intends to operate services on the trunk routes, such as Mumbai—Delhi, Delhi—Bengaluru, and so on, and hand over many routes to Air India Express, where the customer might be price sensitive.
So, in a few years, the airlines will start to look somewhat similar in terms of operational choices. Trunk routes are served by aircraft equipped with business cabins, price-sensitive routes are served by all-economy aircraft, the ability to earn loyalty points for the flights, and the ability to fly from India to a large part of the world on an Indian carrier.
The only thing different will be the scale. While Air India will continue to expand within India, IndiGo's lead will be something to catch up with and take a long time.
Ajay Awtaney writes about aviation and passenger experience at LiveFromALounge.com and Tweets at @LiveFromALounge.
The views expressed here are those of the author and do not necessarily represent the views of NDTV Profit or its editorial team.
