At the Paris Air Show in June, Indian LCC IndiGo firmed an order for 500 Airbus A320 family aircraft, believed to be the largest-ever single aircraft purchase agreement. The fast-growing airline operates a fleet of about 300 aircraft and the new order came on top of existing orders for 480 aircraft to be delivered before the end of the decade. CEO Pieter Elbers took the helm at IndiGo in 2022 after a long career at KLM, where he was also CEO. He did so as India’s aviation market is growing rapidly, fueled by an expanding middle class. IATA estimates the market size will swell by 430 million additional air passenger journeys to and from and within the country by 2040 compared with 2019. The United Nations has also projected that India will overtake China in 2023 to become the world’s most-populous country, with an estimated total of more than 1.4 billion. IndiGo placed its first order with Airbus in 2005 for 100 A320 family aircraft and placed subsequent orders in 2011, 2014 and 2019. The airline is now the largest domestic operator in India with a 64% capacity share of seats.
– Interview by KURT HOFMANN
How different are the European and Indian markets? Let me take a slightly different angle in my answer. The Indian government is clearly on a mission to bring forward India, which is important. There is a strong drive to bring it forward and it is showing. Soon India will be the third-largest economy in the world. Aviation is seen very much as an integral part of that, like we saw in Europe two decades ago, where aviation has been seen as a force for good, as [former IATA director general] Tony Tyler said, and as a new opportunity for jobs, investments, as well as connections between universities, technical institutes, etc. All these positive things are what we saw in Europe, and this is very much live now in India. Yes, there is complexity. Yes, there is regulation. But I also experience a lot of support here and it will evolve over time. The general mindset here is very positive. That’s different compared to Europe now. From my personal perspective, this is a new, wonderful opportunity and it’s an honor really to take this airline to the next level.
What gives you confidence in the Indian market? The potential is enormous. There are around 700 to 750 aircraft in operation in India for 1.4 billion people. In China there are around 4,000 aircraft, and 1.4 billion people also living there. India has just 0.5 aircraft per million people, versus 3.1 aircraft per million for China and 15 per million for the European Union. We are very confident that the Indian market over the coming years will continue to expand, and we will continue that steady growth. There are around 140 airports, including very small ones in the country. We fly to 78 airports; actually, to nearly all that can handle airlines. We are expecting to add another handful of destinations in India. And the government has plans to open up another 40 to 50 new airports. India has also done a lot on safety, which is a number one priority. There have been some safety rankings recently where India has really jumped up significantly. There is a lot of oversight by the Indian aviation authorities. And, of course, with a lot of growth, this has a lot of attention, and rightfully so.
How can IndiGo keep its costs low? This is a very important point. There is a very strong cost-conscious culture in the company; we are very much focused on that. Of course, growth helps regarding efficiency, fleet utilization, optimization of productivity, resource centers, etc. We have a training center that starts at 7 a.m. and runs until 10 p.m. We train 1.800 people a day and this just goes on and on. India is a very competitive landscape. Don’t forget we are doing a lot of flying for first-time flyers. As part of our ambition, giving wings to the nation, a point of reference for those first-time flyers is a relatively low fare. Against that background, the competition is intense, but things are changing. Air India, with the merger with Vistara, is changing; this creates a more mature market. You have seen that in Europe, the US. It will take a bit of time here, but with the size of India, there will be multiple carriers.
You have leased widebodies from Turkish Airlines. How is that cooperation going? We have had the cooperation with Turkish Airlines for several years; this is the next step in our partnership, which at the same time addresses our situation with a shortage of aircraft because of the supply chain issues. We are operating two [Boeing] 777s to Istanbul, one out of Delhi and one out of Mumbai, with a Turkish cockpit crew and our cabin crew. This is a first for IndiGo. As we have no 777s in our fleet, we needed their support. We have operated from Delhi since February, Mumbai since the end of May and we are connecting to the network of Turkish Airlines. It gives us an opportunity to look at IndiGo’s potential capabilities: how we sell, how we can spread our wings. We will get the Airbus A321XLR in 2025. With those aircraft, we can fly well into Europe, so cities like Frankfurt can be reached. For today, the Turkish codeshare allows us to spread our wings in Europe. When we have the XLR and fly to a dozen or more European destinations, we will be in a totally different game.
Do you anticipate having a business cabin on the A321XLR and how will the longer range of that aircraft affect your network? We have not decided on that. We are low cost, but we are not low quality. We have one class, but in today’s configuration we offer XL seats, which have a generous pitch, and we see more and more corporate customers choosing those seats. It is very smart how IndiGo has done this; we keep the simplicity of the one-class concept while addressing the most important element for customers, which is space. But international growth is one of the cornerstones of our strategy. Today we operate to 26 destinations internationally, another six were announced in early June, including flying to Africa for the first time, starting with Nairobi, which is fantastic. We are gradually expanding the range of our international network, which is very important. The next step will be Europe: Frankfurt, Rome, Tel Aviv.
Is IndiGo experiencing some of the technology/reliability and supply chain issues that are affecting the industry? Engines don’t like three things: dust, sand and heat. And we have dust and heat in India, which is a different environment in which to operate compared to Amsterdam. We have an excellent group of technicians and have developed very in-depth knowledge. With the [narrowbody] engines, we operate both the Pratt & Whitney and the CFM, and there is deep cooperation with both companies. But there is a lot of in-house expertise. So yes, engines and the supply chain are issues for us as well, but I prefer to look to solutions, rather than only addressing the problem. We found mitigating measures in terms of lease extensions. We have a steady flow of aircraft coming in.
What is the main challenge? We need to keep up the foundations of the company. We need to keep the costs down, but we need to invest further in digitalization and internationalization. This is new for us. We have started to codeshare, which means we have to create a seamless journey for our customers. A lot of that is new stuff. I see it more as a positive challenge because it is creating a lot of excitement inside the company. We have big ambitions and plans. My message is: Watch this space. Keep following where IndiGo is going as India’s preferred airline.
