Indigo Airlines Launches Long Haul Flights Despite Domestic Market Dominance Concerns, ET Infra

Time of India

a day ago

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Is it not good to give wings to the nation, asked Pieter Elbers ? He was responding to a question about Indigo 's predominant share of the domestic aviation market as industry stakeholders have often expressed concerns about a virtual duopoly.Indigo flies nearly two in three domestic passengers every day, the Air India group is a distant second in market share and other airlines together account for the remaining passenger pie. Elbers , CEO of Indigo, was speaking after the launch of the airline's ambitious long haul operations, with the first flight connecting Mumbai and Manchester , from July one.This marks Indigo's move towards becoming a global airline and will be followed by connections to other European destinations as more leased Boeing Dreamliners come in - 6 in all by the first quarter of calendar 2026.Much like domestic expansion, the airline is targeting a quick scale up internationally too, with 40 per cent ASKs (available seat kilometers) from international operations by 2030. This would make it the second biggest Indian airline on international long haul routes after the Air India group. Indigo has already lined up further expansion on domestic as well as international operations: last month, it firmed up the order for an additional 30 Airbus 350 aircraft, taking the total A350s on order to 60.In all, Indigo has 1330 aircraft on order, including 500 A320s and Elbers said it is considering whether to expand its ATR fleet further as the previous ATR order deliveries are near completion.So, is Indigo's domestic market dominance a concern? Elbers does not think so. 'If you look at our market share on the nation's busiest business routes, we do not have 65 per cent market share on these routes. We have a significantly lower market share on these routes, we are not the largest operator between Delhi and Mumbai - the nation's busiest and business and, one could argue, the most lucrative route…on tier II to tier III and tier III to tier III and some regional routes, we are the only operator.Is it good to give wings to the nation or should the question be whether we are the only operator on these routes? Doesn't stop anyone else from flying…take the example of some airports in the North East where, thanks to IndiGo, there are six, seven daily flights. Nothing prevents anyone else from flying (these routes) so we are opening routes, creating infrastructure to start building on it…market share percentage is lower on hub to hub routes and higher or very high on regional and tier II and tier III.'Also, if India wants to become a global aviation hub, it needs large airlines. 'We need to have airlines which can compete in size and scale with others in the world…So India having two large airline groups with a distinct profile…the pie is big enough for both of us for a country the size of India and then a couple of other contenders. I would say this landscape is not unique to India,' Elbers said.On domestic growth prospects, he said that Indigo operates four types of services: metro to metro routes, metro to non-metro routes, non-metro to non-metro routes and flights under the regional connectivity scheme. On the metro to metro routes, growth will be 'somewhat slower than the average. Where we have seen a lot of growth is the metro to non-metro. So you see the number of flights we've added from Hyderabad, from Bombay. So that has been a huge growth engine.'Indigo has placed its bets on international long haul through expansion of wide body fleet with damp lease of Dreamliners before the twin aisle aircraft order deliveries begin. Also, code shares with major international airlines to offer connections to Europe and the Americas and expansion of the already wide domestic network to feed into the international flights is ongoing.But to achieve these goals, the airline has veered off the generally accepted path of an LCC: it is now offering hot meals, premium seating called 'Stretch', in-flight entertainment etc on the flights to Europe and had already launched a loyalty program earlier.Elbers said that what Indigo had adopted was a 'fit for purpose' strategy, where it is offering services based on market needs instead of migrating the entire network of the airline towards premiumisation. So fares for the newly launched Manchester and Amsterdam connections, for example, will be determined on the cost base and will remain competitive. Stretch is being offered only on select metro routes in the domestic market for now.'I wouldn't call it a premiumization journey because that would suggest that our entire scope of products and portfolio would move to that journey and that's in fact not what we're doing. We have a very solid foundation where we operate a total of 130 destinations, 500 routes domestic and 100 international. And on top of that foundation, we added a product called Stretch on a very selective, specific number of routes…for us, it is a step to prepare for the future and in fact cater to a select group of the Indian customers willing and aspiring for that product.'IndiGo has an existing codeshare and lease arrangement with Turkish Airlines , which allows the Indian carrier to offer connections to 30 destinations in Europe and the USA besides allowing damp lease of aircraft. This relationship has come under intense government scrutiny, due to Turkey's support of Pakistan during the recent conflict and the government has allowed Indigo to continue with the damp lease for three months.Elbers said that the airline was looking at 'different scenarios' and will remain compliant with the regulatory framework. On the codeshare, he said that unless the Indian government issues a different guideline, Indigo will continue with the arrangement while it continues to forge new codeshare agreements with other airlines.