Fate for India’s largest airline Indigo for the next 10 years: light on the Big Bang Airbus deal
As an undisputed domestic leader, Indigo seeks to fix its place and ensure that it gets an uninterrupted supply of new aircraft in the upcoming 10 years. As per the Economic Times, the previous record for the largest aviation deal was held by Air India, who in March of 2023 announced that they will successfully procure 220 Boeing planes and 250 aircraft from Airbus. Regarding the 737 Max offering, Indigo has a word with Boeing which ultimately went with the European plane maker and ensured fleet commonality along with maintaining its superior cost-efficiency model and giving it an edge over look over its domestic peers.
Indigo has placed an order for 500 Airbus A320 Neo family aircraft with a list price reportedly worth more than $50 billion, eclipsing Tata-owned Air India’s Record set in March 2023. It thus seeks to fix its position in the aviation industry with this order status. The A320Neo, A321Neo, and A321 XLR aeroplanes are members of the A320 Neo family. At a time when Indigo’s rivals had struggled to survive in a highly competitive and volatile market, Indigo had slowly boosted its strength step by step and ensured its brighter future ahead.
The domestic airline already had 477 aircraft of the same A320 type scheduled for delivery by 2030 before the latest purchase was approved. According to a source for ET, Airbus wants to retain the current size of its fleet since it plans to retire about 100 aircraft by 2030 and requires new aircraft to reach its desired fleet size of over 700. The Chief Financial Officer of this aircraft, Gaurav Negi, said that this airline intends to hire around 5000 workers and add up as many as 50 aircraft by FY24.
Thus, it is quite evident that this aircraft has set many future goals and plans and has targeted the most competitive markets with its genuine scaling initiatives. In short, Indigo is set to double its size and scale by the end of the decade and stand as the most promising airline service in the Indian aviation industry. If it weren’t for recent supply chain difficulties brought on by Covid-19, a problem that affects airlines all across the world and the expansion would already be under way. Also, the growth had been further diminished by the grounded planes.
The company’s CEO- Pieter Elbers, in an earnings call had said that they are working with Pratt and Whitney to address the shortage of spare engines and supply chain disruptions that have idled more than 35 jets. It is thus planning to extend aircraft leases and wet lease jets to compensate for the lost capacity, he said. Indigo‘s domestic market share climbed from 54.9% in December to 61.4% in May of this year, while Go First’s share decreased from 7.5% to 0.4%, according to data recently acquired by ET Online study based on research from the aviation regulator Directorate General of Civil Aviation (DGCA).
Indigo too faced issues with P&W engines but its CEO said it has taken a whole range of mitigating measures. Picking up Go First’s slack, Indigo has continued its dominance in Indian skies for a long time now. The low-cost airline flew 86 million people in FY23, and its goal for the year ending in March 2024 is to fly 100 million passengers.