IndiGo's Abhijit DasGupta explains how the LCC plans to shake up the India-Europe market ahead of launching its first routes to Western Europe this summer.
Subscribe Now
Don't miss a single episode. Subscribe to Aviation Week's Window Seat Podcast in Apple Podcasts, Spotify or wherever you get podcasts.
Discover all of our podcasts on our at aviationweek.com/podcasts.
Transcript
David Casey:
Hello, everyone, and thank you for joining us for Window Seat, our Aviation Week air transport podcast. I'm David Casey, editor-in-chief of Routes. Welcome aboard. On this week's episode, I'm delighted to be joined by Abhijit Dasgupta, the head of planning and revenue management at Indian LCC IndiGo. Welcome to Window Seat.
Abhijit Dasgupta:
Thank you for having me.
David Casey:
So, since its launch 18 years ago, IndiGo has transformed the landscape of Indian aviation. And what began as a domestic success story, is now evolving into an international force. The LCC is now India's largest airline and has a growing overseas footprint, serving over 35 international destinations across Asia and the Middle East.
So, you're essentially the leader tasked with leading this network growth, which is one of the world's fastest growing airlines. And given the rate you're growing, particularly your international footprint, I imagine you and your team are facing some exciting but very complex issues on a daily basis. How are you managing the expansion ambitions of IndiGo with some of the operational challenges that come with scaling at this pace?
Abhijit Dasgupta:
Firstly, it is indeed a very exciting place to be. India is a vibrant and fast-growing market, and with very aspirational consumers. And we've witnessed that over the course of IndiGo's lifetime on how the consumer's needs and interests have changed and evolved. Over, I want to say the last six, seven years, we started our international expansion, and it's really accelerated after the pandemic. So, today we are operating to actually 40 destinations and we are continuing to add new markets, new cities, new frequencies, new connectivity every month. In terms of managing it, actually, I think a robust planning pipeline is extremely important. We have very high pace of growth, very high pace of fleet induction. So, we work with supersets of markets. We have a long evaluation pipeline in terms of markets that we want to operate, markets that we would like to stimulate, observations we have from connecting flows that we see in our own network, and of course, things that we can glean from external industry data sources. But a long planning horizon is an important piece.
So, there's a bunch of very, very talented people that are continuously looking at not just destination markets, but city pair markets, where to operate from in India, what kind of connectivity are we able to generate if we operate it today, versus the kind of things that we could do if we operated 12 months down the road because another 12 months’ worth of development would've also been in place. So, just having a long pipeline helps. In terms of, yeah, of course we live in, I'll use the word dynamic operating environment, there are variabilities around fleet availability, there are variabilities in traffic rides, there is variability in terms of airport constraints, and of course variability because you don't know what competition will do and what are the things that you may think will be unique, maybe gone by the time they're unique.
So, I think the second piece is important is just having a robust reaction time, having plan A, plan B, plan C in place at all points in time. And having pretty entrepreneurial mindset in terms of being nimble, changing those plans. But the most important is just having a large superset of markets that allows you to choose between one and the other.
David Casey:
So, as well, it’s about having that flexibility, it's about having that adaptability. And I imagine did you gain more flexibility and gain more entrepreneurial mindset during the pandemic? I imagine when you had to react to a very fast pace to markets reopening and shutting at different times?
Abhijit Dasgupta:
Yeah, I've said this at multiple times that the pandemic was very difficult for the industry, both financially as well as operationally. But from a very selfish planning standpoint, it was really an exciting time because we got to experiment a lot. A lot of the sort of classical pipelines were either shut or underperformed, which meant that we had to try new things. And that, of course, drove a very interesting set of markets that were discovered through COVID and that have continued to grow thereafter. But also it imbibed a lot of airline organizations with this need for nimbleness, for flexibility, for the ability to react quickly. And we are no different. Our team really got a lot of practice in terms of fast deployment, quick thinking on our feet and reacting to the changing dynamics in the marketplace.
David Casey:
And I think that ties into a recent announcement that you made that you are launching your first routes to Western Europe. So, you've already had some experience operating widebodies to Istanbul, but you've just taken four wet leased aircraft from North Atlantic to operate routes to Amsterdam and to Manchester as well. Can you just talk a little bit more about the plans for Europe and why have you decided on these destinations in which to launch your first Western Europe widebody services?
Abhijit Dasgupta:
Firstly, as you know, we have a set of widebodies on order. We have [Airbus] A350s on order starting 2027. So, it has always been our intention to sequentially start increasing the range of our network and eventually operate on our markets. But we clearly saw that the opportunity in the market was available even today. And therefore, we started thinking about some interim lift that would, A: allow us to tap some market opportunities quickly, and, B: also allow us to start building some capabilities or accelerate the build of some capabilities that will be useful to us when our bigger widebody pipeline arrives. So, we decided to take the first step with North Atlantic with these four planes.
As far as the choice of markets is concerned, I think these Manchester and Amsterdam have always been on our top five places to go to when we have the plane, so to speak. So, the same kind of evaluation rigor that I was talking about earlier had already sort of preselected a set of markets that we would want to do with our first tranche of widebodies. And these were in that list. Manchester is a market that is not yet directly connected to India, which is strange because it's a very large market size. There's a large diaspora in that part of England that does not have direct connectivity. And with the depth of the network in India that IndiGo brings into play, we have the ability to connect Manchester to at least 80 destinations out of our 90 [direct or] with one stop.
We also have the ability to service that catchment or to provide an increasing portfolio of non-Indian markets beyond India to the catchment in Manchester. We operate to three destinations in Thailand. We operate to multiple destinations in Vietnam. And all of that connectivity is also available. So, we thought that that was quite a strong proposition. Amsterdam, on the other hand, is already a large market from India, and there are very strong business links between the two countries. There's a large community of Indian corporates that have invested in their European offices in or around or close to Amsterdam. And similarly with the breadth of our network in India and connectivity beyond, we think that it's a strong proposition. Of course, there are some more Western European markets that we will announce with this fleet of four airplanes, but we'll get there when we are ready. But there will be a few more that will get added.
David Casey:
Is that likely to be dictated by slot availability?
Abhijit Dasgupta:
Well, amongst other things. But it's a happy problem to have because there's more markets than planes available to us. But yes, slots, that's dictated by also the state of demand right now, the traffic rights, there are multiple other sort of influencing factors. But mostly our decision is made, but we would like to get through some regulatory checkpoints before we announce the next round of markets.
David Casey:
Okay. You've been rapidly expanding your partnerships in recent years as well. I know you've got one with KLM, I think you've got one with British Airways, as well. How important will partnerships be with European carriers to the success of these new European routes that you're planning to launch?
Abhijit Dasgupta:
So, partnerships will always play an important role in our future, and that doesn't just hold with these long-haul markets. But there will be interesting things that we would like to do with like-minded partners even to support our other international and domestic markets. So, a lot of our partners today we work with just for domestic connectivity. So, yes, they will play an important role. End of the day, partnerships bring virtual reach. They also bring mutually beneficial commercial strengths. They bring to the table strengths in home markets that are complementary. So, partners will always play an important role in our future expansion—which is why we have been growing our portfolio partners over the last nine years.
David Casey:
Okay. And you're still looking for more?
Abhijit Dasgupta:
We're always interested talking more.
David Casey:
In terms of how big of a risk this is for IndiGo, we've seen other airlines or the LCCs that have tried to do long haul. I'm thinking Norwegian on transatlantic portfolio. They had some widebodies going into big markets like New York and Boston. We've seen them retrenching and focus back onto their short-haul operations. Is this going to be a risk for IndiGo, a use of compromising your DNA, what you've built, what you're good at in terms of that short haul and that domestic connectivity? I mean, are you introducing too many complexities into the business?
Abhijit Dasgupta:
So, anything new is a risk. But is it a proportionately greater risk? Not so sure. So, firstly, I think over a period of time, what we have done as IndiGo has evolved. So, yes, we are short—we are short haul because that's the type of fleet that we have all always operated. But we have always had a large connecting content. We have therefore learned how to manage and steer connecting traffic for a while. For a long time we have had partnerships and therefore we have learned how to implement, and integrate, and connect well with partners. We have a large corporate content even on our domestic market. So, we have a large portfolio of corporate partners in India. We have launched a frequent flyer program and it's seen a very strong response. We are already participating in some business class markets.
So, who IndiGo is has evolved over a period of time and has adapted too ... and what IndiGo has been very successful in doing in this entire almost 19-year-old history now, is to adapt to the changes that is the changing dynamics of the customer's needs. So, from that standpoint, we don't think it's so much of a risk. Of course, with any new plane type, and the same goes for our [Airbus A321]XLRs, there is new capabilities that we need to build. There's new changes to our operating procedures that we have to plan for. There is new capacity that we need to install in terms of resourcing pipelines, training pipelines. It's a new way of conducting an business on the operational side, which we have already started to develop.
And this step into long-haul flying with these damp-leased aircraft will enable accelerate some of that capability building. So, there is always risk, but we're taking this step by step and trying to mitigate or build for all the things that represent the risk. There will, of course, always be a market risk. And that's something that you have to deal with as an airline, regardless of what plane are operating. But we are quite confident that we can make this work.
David Casey:
Okay, fantastic. You mentioned then the XLR, which I think you've got either 70 on firm order or an option, I think a total of 70. When are you starting to get the XLRs? When will they be first delivery starts? And how do you anticipate using them in terms of your European network and that European expansion?
Abhijit Dasgupta:
So, our fiscal [year] goes from April to March. So, we expect our first XLRs to be with us by the end of fiscal year ending '26, which is March '26, exactly when of course we'll confirm over a period of time. But we expect the first couple of planes to be in our fleet in the next fiscal. And then our fleet pipeline has always been high-paced, so we expect deliveries to ramp up quickly. The XLR basically extends our narrowbody range from what is today's six and a bit hours. There are some routes that do we do today that are six hours, 40 minutes. But there's sort of very few of them. So, six and a bit hours to about eight and a bit hours. And that additional radius brings us Eastern Europe [and] the Nordics within range. They bring the East Asia, a lot of East Asian markets within range.
And then because India has a large geography, it also allows us to connect some airports that we already operate to, but not from certain parts of India. So, if I may use the example of Bali. Today, we operate Bangalore to Bali, which is the closest end of India, so to speak to Bali. But that's already six and a half hours. So, the XLR will then allow us to reach Bali from markets like Delhi and Mumbai. Similarly, Nairobi. Today, we operate from Mumbai particularly allow us then to look at Nairobi from North India. So, there are several such markets. We operate to Istanbul today. And the XLRs will certainly enable more connectivity there. Hong Kong is another market, which today we fly from Delhi. So, there are these such markets that also become a part of that superset that we can evaluate. But the XLRs will do it, basically plug into our largest airports, operate these long thin markets that are seeing a lot of customer interest.
David Casey:
Okay. In terms of your wider international expansion then, both with the XLRs and when the A350 delivery starts as well, are there any particular markets where India is underserved at the minute that you're looking to, I'm thinking about the Australian market, I'm thinking about the US market, quite underserved from India? I mean, how much are these markets playing into your thinking at the minute?
Abhijit Dasgupta:
Well, with the XLRs, certainly we will see these planes really enable connectivity to markets that have not been directly connected to India before. We think this plane hits a sort of sweet spot in terms of its size and its range to really fly into markets that see a lot of traffic flowing over other hubs but have not been connected directly, purely because they're not markets that have been large enough for widebodies. And widebodies are really the only planes that could fly eight, eight and a half hours until now. So, there will be a lot of new connectivity that these planes will bring. And with the A350s, of course this plane is really capable of flying anywhere in the world. And therefore, anything beyond the XLRs range or even sometimes overlapping slightly with the XLR range, that is thick enough to support a big-gauge plane is in our consideration set.
David Casey:
Okay, fantastic. Well, we're all out of time for this week's episode, but I just wanted to thank you for being so open and honest, and telling us more about your strategy both with Europe and with the XLRs. It's been fascinating to hear about. And from a personal perspective, someone who's from Manchester, I'm really looking forward to seeing IndiGo at Manchester Airport once you start flights in July. So, thank you for being with us today. Thank you to you, our listeners, and thank you to our producer, Cory Hitt. Until next time, this is David Casey, disembarking from Window Seat.
Related Content
