IndiGo Stands By Rapid Growth, Budget Carrier Strategies

Aviation Daily Aug 19 , 2010 , p. 10
Neelam Mathews

IndiGo, with a fleet of 27 aircraft, says its fast-paced growth plan is paying off, based on a comparison of its market share with those of its closest competitors.

In July, IndiGo captured 16.9% of the Indian market, followed by SpiceJet with 13.2%, JetLite, 7.5%, and GoAir, 2.28%.

Rahul Bhatia, Group MD Interglobe Enterprises and founder of IndiGo, says, “We have a long-term view on India. When IndiGo placed orders [for 100 Airbus A320s], people thought we were crazy.”

With a delivery program “up to scale and speed,” the airline is set to receive eight aircraft by the end of the year, which will bring its fleet to 35. IndiGo has secured government permission for another 150 aircraft, some of which will be replacements. Asked whether he will consider another OEM, such as Boeing, Bhatia says, “When manufacturers come back with the right price, we shall see.” He expects to place an order in the next two or three years.

While Bhatia refuses to be drawn into a discussion on the model type he is looking to buy, he acknowledges he does not want to add complexity to his fleet of A320s. The aircraft restrict IndiGo to serving neighboring countries with a flying distance of about five hours, but once it becomes eligible to fly internationally in August next year, Bhatia says, “There are enough fish to fry in that range.”

The Interglobe Enterprise Group, which has a joint venture with Accor Hotels for the economy Ibis hotel brand in South Asia, will provide synergies as the airline and hotels expand. Already, there are seven hotels being built in second-tier cities. “Cross-marketing between the two products is an evolving process,” Bhatia tells The DAILY.

He adds there are no plans at the moment to add regional jets to the fleet.

IndiGo is said to have sought clearance for an initial public offering, and appointed bankers to raise as much as $400 million. “We’re looking at all options to raise funds. We’re a virtually debt-free company,” says Bhatia.

When asked whether he would look at a full-service airline model, he says, “Not in my lifetime. Our model works well.”

The carrier recently decided to redesign uniforms, which Bhatia says is part of the airline's efficiency plan. “They will be cheaper to maintain, as presently, we have three different types.”