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April 18, 2024
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UPDATE – The Delhi-based low-cost airline IndiGo celebrated the milestone, having flown 100 million passengers in a calendar year. It is the first Indian airline to achieve this milestone.

With this achievement, IndiGo has joined a select club of global carriers to operate on such a scale. This development further cements IndiGo’s standing among the 10 largest airlines in the world by passenger traffic,” the airline, which entered its 17th year of operation, said in a statement. Sources said the achievement was registered on Monday and not on any particular flight or sector.

In 2022, IndiGo flew 78 million passengers (slightly above pre-COVID-19 levels). “The new milestone represents a 22 percent increase in passenger traffic for 2023,” the statement said, adding that the airline recently achieved another first for India by becoming the first airline to operate more than 2,000 flights daily.

A company update issued on December 14 this year, titled Interglobe Aviation by Motilal Oswal Financial Services Ltd., said that “the company plans to increase its fleet size to 350 in FY24 from 306 in FY23 (334 as of Sep’23) to cater to the increased demand in the domestic market, and also plans to add 10-15 new destinations.”

The update was issued after a meeting with IndiGo’s management at the company’s office in Gurugram on December 7.

International expansion provides new growth avenues, the report said. IndiGo is currently the seventh-largest airline in the world, with a market share of 18.5 percent. “It aims to become the third largest in the world and has strategies in place to expand its global footprint significantly,” it added.

This has been a good year for the Indian airline, which commands an over 60 percent market share domestically. In June, it placed a firm order for 500 Airbus A320 family aircraft, providing the airline with a further steady stream of deliveries between 2030 and 2035.

This 500 aircraft order is not only IndiGo’s largest order but also the largest-ever single aircraft purchase by any airline with Airbus,” Airbus said in a statement.

In August, the airline declared its highest-ever quarterly earnings at Rs 171.609 billion and its highest-ever net profit of Rs 30.906 billion for the first quarter of the fiscal year 2023-24.

Strong operation that can deliver

Commenting on the airline’s achievement, Satyendra Pandey | Managing Partner, Aairavat Technology & Transport Ventures Private Ltd. (AT-TV) said that 100 million passengers carried by any airline speaks to a strong operation that can deliver day after day continuously. This requires a large market and the ability to capture a significant portion of that market.

“Other airlines in this league are dominated by North America-based airlines, including American Airlines (199 million passengers in 2022), Delta Airlines (175 million), Southwest Airlines (157 million), or European carriers Ryanair (168 million) and Lufthansa Group (101 million),” he says points out that these are legacy airlines dating back to over 90 years and ones that have grown via a series of mergers.

“For instance, American Airlines in its most recent avatar is the amalgamation of American Airlines and US Airways (merged in 2005), Delta Air Lines is an amalgamation of Northwest Airlines and Delta (merged in 2008). SouthWest bought out a few competitors including AirTran (merged in 2014) and MorrisAir (merged in 1993),” he points out.

Pandey says IndiGo on the other hand has achieved the 100 million mark organically and in a record time as its operations only began in 2006. “Just a decade into operations, IndiGo was already flying 39 million passengers with a market share of 39 percent. Fast forward to 2023 and Indigo carried more passengers in the 1st month of 2023 than the total domestic passenger traffic pan India for 2015 for the same period.”

He is of the view that this speaks both to the market potential and to IndiGo’s success in capturing the market. “However, size also brings in complexity and the year ahead is going to be a true test of Indigo’s foundation given the market dynamics, geopolitical dynamics, and Pratt and Whitney-related issues,” Pandey says.

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Former Senior Deputy Editor at Business Line (aka The Hindu Business Line)

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