Skift Take
— Peden Doma Bhutia
India’s largest airline has announced a radical shake-up of its operating model. IndiGo says it will debut a business class product by the end of this year.
CEO Pieter Elbers announced the change during an earnings call on Thursday as part of a broader plan to adapt to the changing travel landscape in India. Elbers highlighted the increasing demand for premium travel and expressed confidence that the new offering would cater to the needs of corporate travelers.
“We will be launching a tailor-made business product on the busiest routes and (business) routes of the country before the end of this year,” said Elbers.
He indicated that further details regarding routes and launch timing would be unveiled in August.
India’s Growing Economy
With India poised to become the world’s third-largest economy by 2027 and a growing appetite for diverse travel experiences, IndiGo sees its expansion into the business class segment as a strategic move to prepare for future demands.
The IndiGo CEO reiterated the airline’s commitment to maintaining its unique identity even within the premium segment, ensuring that the new offering would reflect the core values of the carrier.
The announcement comes as IndiGo embarks on ambitious international expansion plans. It recently launched several new routes and aims to bolster its global presence.
Since taking the helm at IndiGo in 2022, Elbers has been vocal about the airline’s ambitions for international expansion.
IndiGo’s International Network
In 2022, the airline had connections to 26 international cities. However, under Elbers’ leadership, IndiGo has bolstered its global network. The airline currently serves 33 international destinations, connecting travelers from 18 Indian cities to key global hubs.
During the 2024 fiscal year, the airline launched seven new international destinations in Asia and Africa, Elbers said during Thursday’s call.
During this period, the airline also signed a codeshare agreement with British Airways and Malaysia Airlines and extended its existing deal with Qantas.
IndiGo’s Aircraft Orders
To help the airline towards its internationalization goals, IndiGo recently placed its first-ever order for widebody aircraft. It plans to offer nonstop connectivity from major Indian airports, removing the need for travelers to transit elsewhere.
In separate developments, IndiGo placed an order for 500 narrowbody aircraft with Airbus last June. The airline has the longer-range XLR variant in its fleet pipeline and has purchase rights for an additional 70 aircraft.
Both the plane orders form part of a wider strategy to achieve the airline’s vision of making IndiGo a global aviation player. Elbers said that it would also help realize India’s vision of developing India into a global aviation hub.
India’s aviation potential was discussed in detail by Air India CEO Campbell Wilson at the Skift India Summit in March.
Other Key Takeaways From the IndiGo Earnings Call:
- Passengers increased by 24.7% to 106.7 million
- For fiscal 2024, IndiGo reported its highest-ever total income of around INR 712 billion ($8.5 billion), 27% higher than last year
- The airline reported an annual net profit of INR 82 billion ($985 million), compared to a net loss of INR 3 billion ($36 million) in 2023.
- After a period of five years, the airline has been profitable in all four quarters of a financial year
- IndiGo also suggested that it will be making enhancements to its loyalty program. At present, the airline has a co-branded credit card system.
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Photo Credit: IndiGo CEO Pieter Elbers. IndiGo
