IndiGo confirms damp lease of 787-9

IndiGo, the Delhi-based low-cost airline, confirmed it has agreed to lease one Boeing 787-9 aircraft from Norse Atlantic Airways. The airline said IndiGo and Norse will continue exploring opportunities to contract additional aircraft and increase collaboration. Social media said IndiGo could lease up to six Boeing 787 aircraft from Norse. The airline said the agreement's initial term is six months, extendable to 18 months. The aircraft will arrive in the next few weeks and is expected to start commercial operations in March this year. The lease could continue until IndiGo receives its ordered Airbus A 350-900 widebody aircraft. IndiGo said in April last year that it placed a firm order for 30 Airbus 350-900 widebody aircraft, with an option for an additional 70 aircraft. Deliveries are expected to commence in 2027. In addition, the airline's order for the Airbus A321XLR is scheduled to begin delivery this year, which will further help the airline expand its global network. A little help from the government for industry With global supply chain issues affecting the growth of the Indian aviation industry, the Directorate General of Civil Aviation (DGCA), the Indian civil aviation watchdog, recently amended the rules to allow wet aircraft leasing. A damp lease includes the aircraft and some crew from the entity it leases. Interestingly, on Thursday, Boeing held a media briefing on its 20-year outlook for the Indian and South Asian markets. During the briefing, Boeing officials said the Boeing 787-9 could quickly fly a Delhi-Seattle flight with 315 seats. The Boeing official did not explicitly mention the route IndiGo will operate the aircraft on but gave an example of the aircraft's range. Commenting on the development, Pieter Elbers, CEO of IndiGo, said that as part of the airline’s broader strategy to expand its international network significantly, “we confirm this damp lease of one Boeing 787-9 aircraft from Norse Atlantic Airways. Our vision is to transform into a global player by 2030 while having strong roots and continuous expansion in India, and we are strategically moving ahead in that direction.” Currently, most passengers flying out of India are flown by foreign carriers. Almost 75 percent of the India-North America traffic is estimated to connect at a global hub, with Gulf carriers carrying about 40 percent of the traffic and European hubs carrying another 30 percent. Our Indian domestic traffic model can be seen here. Entry into Europe soon? While IndiGo is silent on where this latest widebody aircraft will be deployed, earlier this year, the Indian media reported that the airline had advertised for station managers’ positions in Amsterdam, London, and Paris (IndiGo seeks airport manager at London Heathrow, Paris, and Amsterdam - The Economic Times). Elbers indicated last month during a telephone call with analysts that the airline was exploring interim solutions for the early introduction of long-range aircraft through wet leasing. The airline aims to operate at least 40 international destinations by the end of this year. During the current quarter, it operates at 34 international destinations. Commenting on the development, Satyendra Pandey, Managing Partner Aairavat Technology & Transport Ventures Private Ltd felt that the IndiGo damp lease is driven by its plans and the market realities of constrained infrastructure, challenges with OEMs, and soaring demand. “While IndiGo has its own firm orderbook of 30 wide-body A350s, these deliveries are scheduled from 2027 onwards. Thus, a bridging arrangement via the damp leases significantly accelerates IndiGo’s long-haul strategy,” he says, adding that most recent IATA figures showed international demand outpaced capacity growth in 2024 (13.6 percent and 12.8 percent, respectively). Pandey adds that demand for outbound travel from India grew, and yields held firm. To service this demand, especially on long-haul flights, Slots, parking, and bilateral rights at key airports continue to be very valuable, and the ability to corner these is critical for success. Pointing out that IndiGo has chosen to wet-lease its capacity from Norse Atlantic Airways - a Norwegian low-cost long-haul airline with a fleet of 12 Boeing 787s serving 15 destinations, he says that “interestingly, the configuration on the 787s being damp-leased works out well as they are in a dual-class configuration that ties in with IndiGo’s product plans while providing Indigo an opportunity to test out demand patterns which may inform decisions on their own fleet configuration.” He adds that strategically, with a market share north of 60 percent in the domestic market, the accelerated foray into international will be well received by investors and passengers alike. “It also enables IndiGo to work towards its international capacity deployment plans, make a dent in the international market share of Air India (the only other Indian airline with a long-haul product), and capture a portion of the premium demand,” he feels.

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