IndiGo completes 20 years of operations, emerging as India’s largest airline after surviving a turbulent aviation market. As it eyes global expansion, the airline faces challenges of scale, competition and international ambitions
August 4 marks two decades of IndiGo. From its very first flight from Delhi to Guwahati and onwards to Imphal to the 2,200+ flights it operates on average in normal times, the airline has come a long way and helped Indian aviation grow in the process. Just for records, the airline operated to four airports and six flights a day with its first aircraft.
Unmistakably, it also remains the airline that has benefited the most from the growth of Indian aviation. What began as one more entrant in a crowded, unforgiving Indian aviation market has since become the undisputed giant of the skies. The next quest, obviously, is flying across the world, where the airline has not seen as much success as it has on domestic routes. The story is as much about discipline and timing as it is about airplanes.
Indian aviation is filled with skeletons, and IndiGo, undoubtedly, has emerged as the green shoot in the wasteland. The mega order by InterGlobe, when the airline did not have a name and Indian aviation had fewer than 300 planes, had turned heads. But looking back 21 years, one knows that the now-estranged co-founder Rakesh Gangwal and Rahul Bhatia had a plan and knew how to execute it to reach where they are today. They had the method in the madness that is Indian aviation.
More from BusinessIndiGo started at a time when India had Air India, Indian Airlines, Alliance Air, SpiceJet, GoAir, Kingfisher Airlines, Air Deccan, Jet Airways and Air Sahara. The airline climbed the market share charts, one plane at a time and one route at a time, to become what it is today.
The airline existed alongside the shiny planes of Kingfisher, the common man-painted Air Deccan, the flying sun of Jet Airways and the Sahara pranaam of Air Sahara. Big and small, many airlines started and folded up, but IndiGo continued its upward march to reach where it is today.
IndiGo’s strength
IndiGo’s strength is its scale and size. This scale and size are also its biggest weakness. While the scale and size give it the ability to expand, connect passengers and start multiple new routes, these very routes are accused of creating a monopoly, and the large market share is seen as a way of pushing fares up in the market.
To be fair, market share is a function of capacity in the market, and IndiGo has had a legacy of adding capacity to domestic skies. At the same time, the airline has time and again pushed competition with aggressive pricing and capacity addition to skew the market. Is all fair in love and war?
This large size acts as an immediate challenge when there are events that can turn the world upside down, like a pandemic or a war that leads to large-scale groundings and a sudden disappearance of traffic.
The size then comes into play as a challenge for fulfilling obligations on the financial and maintenance side for both people and planes.
International dream is still a dream
The celebration of two decades of existence comes against the backdrop of the decision to send back the damp-leased Dreamliners and curtail the presence in Europe.
The planes are going back as fast as they came, with a much longer plan. The airline has not been particularly lucky with many of its international forays. While the blame may lie elsewhere, either with geopolitics or high oil prices, the airline has to look for international expansion to get over what looks like a saturated domestic market and reduce the impact of the sliding rupee by selling tickets in international markets.
Next 20 years?
The airline has had distinct eras of connectivity — the new routes to begin with, the metro focus later, followed by regional focus in domestic as well as international markets.
The time has now come for a global focus, for which it has already ordered 60 A350s, with deliveries starting in the next fiscal year.
Only two airlines in India today have survived longer than IndiGo, but both have undergone ownership changes. IndiGo has aircraft deliveries lined up for another decade. The lack of new technology would mean that the airline would ditch its famed six-year cycle and hold planes longer, looking for what is available in the market for deliveries beyond 2035.
Incidentally, this is also the time when Airbus believes it would have a new type in the market that is significantly ahead in technology compared with current times.
From India by IndiGo, the next twenty years for IndiGo will be “World by IndiGo”. In the past, two airlines tried — Kingfisher Airlines and Jet Airways — and both failed miserably. Can IndiGo change that?
