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IndiGo emerges as global leader as domestic market stabilises

written by Hannah Dowling | January 21, 2021

Indian low-cost airline IndiGo has emerged as one of the world’s largest airlines by capacity, thanks to a near-total recovery in the Indian domestic travel market.

According to data firm OAG, the Indian carrier is now the seventh-largest in the world by capacity, and the largest outside the US and Chinese markets.

IndiGo reportedly took an additional 44 planes from Airbus in 2020, the most of any customer, ahead of Delta Air Lines and China Southern, as the carrier replaced its older planes with newer, more fuel-efficient models.

The airline is also gearing up to continue expanding its fleet in the coming years.

The airline still has 580 planes on order with Airbus that have yet to be delivered, and expects to take delivery of its outstanding plane at a rate of around 50 planes per year.

“As things stabilise, I’m very optimistic that by the end of 2021, I think we’ll be totally back to normal,” CEO Ronojoy Dutta told Reuters.

“And I think 2022 will be a great year for us in terms of growth and profitability.”

Indigo has been able to benefit from a government that continues to push for more inter-connectivity, with particular emphasis on air travel, to ease congestion on the nation’s crowded roads and public transport systems.

Currently holding 52 per cent of the domestic market share in India, up from 47 per cent in 2019, the airline is primed to expand both its domestic and international network in the near future, as it eyes a profit in the next financial year.

In the near future, Dutta said the airline is expanding its reach to smaller Indian cities such as Ranchi, Patna and Gorakhpur to replace a fall in business travel on larger routes like New Delhi-Mumbai.

While the airline’s global expansion will be limited by its exclusively narrow-body fleet, analysts believe its strong financial position could see it thrive against domestic and regional rivals such as SpiceJet, AirAsia and Lion Air.

“IndiGo has cleverly identified its bases within India and is now getting ready to spread its tentacles all across the sub-continent,” said Shukor Yusof, head of Malaysia-based aviation consultancy Endau Analytics.

The Indian carrier could then become a contender against competitors for all flights within a seven-hour radius of its Gurugram base.

Despite the recent turbulence, Dutta expects the proportion of capacity deployed to international markets to rise a few percentage points each year.


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