IndiGo placed its first-ever order for wide-body aircraft on Thursday. This move signals the low-cost carrier’s strategic expansion into the international travel market, aiming to compete more effectively with major Gulf airlines.
IndiGo’s strategic expansion plans
IndiGo has ordered 30 A350-900 aircraft and anticipates deliveries to commence in 2027. Additionally, the airline holds purchase rights for an extra 70 Airbus A350 family planes.
Although Airbus no longer discloses prices publicly, based on the last catalogue rates from 2018, the recent agreement with IndiGo would amount to over $9 billion. However, in reality, industry insiders suggest that aircraft are typically sold for less than half of the listed price after factoring in customary discounts for bulk orders.
Indian carriers are striving to keep up with the rapid growth in air traffic within the country, fueled by increased demand for both domestic and international air travel following the pandemic. This demand surge comes at a time when plane manufacturers are grappling with challenges in meeting their production targets.
According to industry and government data, the number of international air travelers in India is projected to reach 160 million by 2030, up from 64 million in 2019. However, a significant portion of this traffic is currently served by foreign carriers, with airlines like Emirates being prominent players in this market.
Foreign airlines captured 55% of outbound international traffic from India in the final quarter of last year, according to recent government data.
IndiGo’s new order enables non-stop flights to Europe, North America, and as far as Australia and the Far East, bypassing layovers in the Gulf.
In a statement, IndiGo’s chief executive, Pieter Elbers, expressed that the new fleet would enable the airline to enter its next phase of becoming one of the leading global aviation players.
With a 60% share in India’s domestic aviation market, IndiGo aims to double its total capacity by the end of the decade while also expanding its network in international markets.
IndiGo currently deploys 27% of its capacity, in the form of available seat kilometres, on international routes.
IndiGo has recently expanded its flight operations to include destinations in Africa, West Asia, and Southeast Asia. Additionally, the airline is bolstering its presence in Europe through a codeshare partnership with seven carriers, including Turkish Airlines and KLM.