IndiGo’s Evolution And Prospects After Airline Steps Up Business Class Offerings

Recent announcements by Indian low-cost carrier IndiGo suggest that the airline is headed for a significant departure from its traditional business model. From an airline that once flew an all-Airbus-narrowbody fleet in a single economy class configuration to now ordering widebody jets and announcing a business class product, IndiGo has definitely evolved.

IndiGo to have a business class cabin on some routes

India’s largest carrier, IndiGo, has never been the kind to rest on its laurels and has constantly evolved over the years. But some of its latest announcements have hinted at a significant shift in business strategy that will have the airline looking quite different from what it does today.

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During a recent earnings call, IndiGo’s Chief Executive Officer, Pieter Elbers, said that the carrier will launch a business-class product on some of its planes by the end of this year. He said,

“Over the past 18 years, India’s and IndiGo’s growth story have been closely interlinked. We believe as India gears up to become the third largest economy in the world, it’s our privilege to provide [it with] even more options to choose from as [people] travel business.”

It’s too soon to tell what the premium product on IndiGo will look like, but more details are likely to emerge in August, coinciding with its 18th anniversary. The airline is likely working hard behind the scenes to finalize a product if it intends to have it ready by the end of 2024, and one can expect more announcements in the coming few months.

Photo: BoeingMan777 | Shutterstock

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Evolving strategy

While IndiGo has been very successful as a low-cost airline in the last several years, it seems the carrier feels the need to evolve, given the changing dynamics in Indian aviation. Its position as the country’s number one carrier has primarily been unchallenged, but the consolidation of airlines under the Tata Group could pose a challenge in the future.

IndiGo will offer the “tailor made” product on “the busiest and business routes of the nation.” These are likely to be trunk routes, such as Delhi-Mumbai, Delhi-Bengaluru, and Mumbai-Bengaluru, among others.

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It’s interesting because the Air India group is also following a similar trajectory and has kept the major routes reserved for full-service Air India, where demand for a business class product is high, and pulled out of many tier 2 and 3 networks, leaving them for its low-cost subsidiary Air India Express.

IndiGo’s recent Airbus A350 order also reflects its ambitious long-haul strategy. After serving medium-haul overseas routes in the Middle East and Southeast Asia, the carrier clearly wants a share of the long-haul market and is not willing to leave it entirely to Air India.

Impressive profit

IndiGo’s announcement of a business class product comes alongside a Q4 net profit of more than $220 million. For the quarter ending March 2024, the airline increased capacity by 14.4% and saw a 14% passenger increase.

Photo: BoeingMan777 | Shutterstock

One of the many reasons why the airline can try out these new strategies is because it has the financial muscle to do so. With business class seats on some of its planes by year-end and dual aisle planes joining its fleet in the coming years, it’ll be interesting to see how these decisions serve IndiGo in the near future.

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