IndiGo has grown to become the largest commercial airline India by a wide margin. How did this young carrier grow to become the 7th largest global airline?
IndiGo dominates the Indian aviation market with a market share of 61 percent as of May 2024, operating over 2,000 flights per day, across 88 locations across India and 34 international routes. Having almost 1,000 aircraft still on order, IndiGo is set to maintain its unprecedented growth. How did the young airline, only established in 2006, manage to surpass flag carrier Air India and deliver one of the most reliable services across the country?
Business partners
IndiGo was founded by Raskeh Gangwal and Rahul Bhatia back in 2006. Few details can be found about business magnate Bhatia, but Gangwal’s past experiences serve as an important framework for IndiGo’s operations. Gangwal was introduced to the aviation industry back in September 1980, when he started as an associate at Booz Allen & Hamilton Inc. Booz Allen is well known for its groundbreaking work as a military contractor during the Second World War, where Edwin Booz and James Allen helped to upgrade the navy’s phone systems and reorganization of mail distribution efforts.
As the war was about to spread to American shores, Booz Allen advised the Secretary of the Army Robert Patterson to develop a war preparation report. The consulting and contracting firm Booz Allen is filled with history and expertise, serving as stepping stone to integrate cutting edge business operations into practice. After his career at Booz Allen, Gangwal moved to United Airlines serving as manager for strategic planning becoming CEO at the U.S. Airways Group between 1998 and 2001. Gangwal served as the CEO of Worldspan Technologies from 2003 to 2007. Together with Bhatia, he founded IndiGo in 2006. With just one aircraft, IndiGo was far removed from the titan it has grown to become today.
Building IndiGo
In July 2006, IndiGo took delivery of its first Airbus A320 Aircraft. The first A320 was part of a larger order consisting of 100 Airbus A320s. IndiGo touted the state-of-the-art aircraft that featured the best software, hardware and interface design available on the market. President and CEO at IndiGo, Bruce Ashby, commented that starting out with a fleet from the same family allowed the new airline to deliver affordable travel. With a whole fleet of modern A320s, IndiGo would solely dedicate itself to delivering cheaper flights throughout India.
In the same month, in July 2006, IndiGo announced it partnered up with eSpherical.com Inc. to deliver mobile booking and payments through mobile devices. IndiGo became the first Indian carrier to offer this convenience to its customers, leap frogging it beyond the nation’s flag carrier Air India, who was running on outdated software well into the 2010s. At the end of the month, IndiGo unveiled it would start revenue operations with its first flight announcing its arrival onto the Indian aviation market starting the 4th of August, 2006.
The maiden flight would carry the airline’s first customers from Delhi to Guwahati, with its brand new A320 aircraft. Rahul Bhatia, Managing Director at parent company, InterGlobe Enterprises, said that the Indian aviation market was set for exponential growth as disposable incomes from middle income households increased, unlocking an entirely new customer segment eager to travel. The Indian government, he added, was taking the necessary steps to facilitate this growth. IndiGo positioned itself as the hassle free travel option, delivering a reliable service through affordable pricing, the airline noted in the press release.
Expanding the IndiGo network
In October 2006, IndiGo announced it would enhance its operations by expanding its network across southern India. The introduction of new routes would be a welcome addition to the small operations at the airline, who operate a limited number of flights, primarily between the major metropolitan areas Delhi and Bangalore, serving the cities twice a day. From September 2006 onward, IndiGo opened up its service to Delhi and Hyderabad. Adding these routes would open up travel options between the country’s important business hubs, making IndiGo an important connector for travels between these regions.
Furthermore, it would unlock leisure tourism toward the popular southern region of the country. A month later, the company said it would extend its operations to Western India, adding Mumbai to Vodara, Delhi and Nagpur among others. As its A320 deliveries started to reach its primary hubs, the newly formed airline was gearing up to rapidly expand its service offering to customers.
An important milestone in the company’s efforts to maintain stable operations has been its CAT-III approval from the Directorate General of Civil Aviation (DGCA), allowing for pilots to fly in fog conditions. Through the regulatory approval, IndiGo could deliver operations during the winter season. Passengers meanwhile would experience less fog delays, which are further reduced through the airline’s A320 family, equipped with CAT-III equipment and the necessary CAT-III training programs.
At the closing hours of December 2006, IndiGo started to rapidly expand its network adding routes from Delhi to Goa and Delhi to Jaipur, with operations commencing in January 2007. The company announced the opening of Delhi to Kolkata starting operations in the beginning of February, 2007. New routes were opened between Mumbai and Kolkata starting daily flights from January 2007 and Mumbai and Chennai seeing services from February 2007. A host of new routes would follow over the course of the same period, drastically improving the carrier’s service offering.
Aggressive expansion
In May 2018, IndiGo announced it had further strengthened its service offering across India by adding 20 new flights to its operations. As per July 2018, the low-cost carrier would start operating two flights between Bengaluru and Varanasi, and between Bengaluru and Chandigarh. Its offering for flights between Kolkata was further improved. Through the expansion of its flights, IndiGo wants to enhance its business and leisure offering. The Indian airline also finds itself in routes that would prove valuable to organic growth, as the regions are developing destinations for domestic travelers.
The following month, in June 2018, IndiGo expanded to its 56th location through the addition of Surat, which would connect the large western city to major Indian urban centers such as Delhi, Mumbai, Bangalore among others. In the press release, Chief Strategy Officer at IndiGo, William Boulter, said that routes to Surat could hold immense potential for the airline and part of the company’s growth strategy, adding more traveling options to its customers. The expansion to Surat is another addition to the expanding network of IndiGo, who also opened services between Jaipur and Varanasi and Mumbai and Bagdogra.
In January 2019, IndiGo appointed Ex-United Airlines President, Ronojoy Dutta, as CEO for the upcoming airline to aggressively expand the Indian carrier into the long-haul flight market. The appointment comes after Adiya Ghosh resignation, who moved to accommodation platform Oyo, Skift noted. Dutta’s appointment comes swiftly after the disappointing short stint of former United Airlines executive Gregory Taylor, Skift commented. Dutta’s appointment doesn’t come as a surprise, as he’s worked together with IndiGo co-founder Gangwal during his role at United.
In the press release, IndiGo highlighted Dutta’s extensive experience in the aviation industry, through his twenty year long career at United Airlines. At United, Dutta held multiple roles, from Senior VP of Planning to VP of Information Technology. Apart from his roles at the American airline, he also served as advisor during restructuring efforts at Air Canada and U.S. Airways and other consulting roles at other airlines. Dutta garnered knowledge about the Indian aviation market through his role as president at Indian airliner Air Sahara, giving a unique skill set that would serve IndiGo in its domestic and international growth strategies.
Relentless performance
The relentless drive to set a new benchmark for on-time performance has reaped many rewards for IndiGo. In July 2018, IndiGo was named the ‘Best Low Cost Airline in Central Asia & India’ during the Skytrax World Airline Awards 2018 for the 9th consecutive year. Chief Commercial Officer, William Boulter, said in the press release the company was very proud to receive the award despite fierce competition in the region. Customer facing teams at IndiGo, he added, have delivered an outstanding service to uphold the airlines on time performance.
On time performance is one of the most critical parts of an airline’s operations, as poor on time performance can lead to ballooning costs. Hence, on time performance or OTP, is used as a primary key performance indicator for airlines. Strong on time performance means an airline is capable of streamlining the different components necessary for its operations. OTP Management isn’t designed to reach 100 percent punctuality, Boston Consulting Group (BSG) points out. Airlines use this metric to measure the performance across the entire organization.
Airlines maintain their own strategy in achieving their on time performance targets. Some airlines set the target too low, while others over invest in achieving a high rating. Setting the on time performance too low erodes a brand and can lead to costly delays, while achieving too high ratings can result in planes sitting idle for too long, achieving the same result as airlines who score poorly. Executives responsible for planning therefore have to strike a careful balance by maintaining operations that are within reasonable limits without harming the customer experience.
BSG cites an airline that found a 90 percent correlation between customer satisfaction and on time performance. Additionally, employee happiness is improved through strong OTP. Poor performance meanwhile, leads to costly refunds, rebooking and paying overtime for crew and ground staff. Poor OTP is primarily caused by complexity. Systems need to work harmoniously for stable operations and in turn a good OTP rating. Scheduling and personnel operations need to continuously communicate with each other to prevent disruptions in scheduling, the BSG points out.
The rate of complexity increases as new routes are added, schedules are adjusted, staff is onboarded and in-flight offerings are changed. Turn time, the time to offload and onload an aircraft for its next flight, has a dramatic impact on the on time performance. Scheduling too tightly, will result in higher chances of delays when one part of the entire chain experienced difficulty. Otherwise, having a longer turn time, prevents the airplane from generating revenue,
IndiGo has been heavily investing in flight planning technologies to improve its operations. In June 2017, Director-Flight Operations Support at IndiGo, Aakash Bhatnagar and Regional Head/Senior Sales Director for the Asia Pacific Region at NAVBLUE William Hu, detailed how the Airbus’ NAVBLUE software helped keep flight operations manageable in the complex and crowded aviation space. NAVBLUE provides Flight Operations and Air Traffic Management solutions to airlines. Being a subsidiary of Airbus means IndiGo could utilize all advantages of the software across its A320 fleet.
The collaboration with IndiGo started in 2007, during the start of the airline’s operations. IndiGo started with Navtech’s Navigation database services and flight planning software. As time progressed, the low-cost airline added FlySmart applications, with the software transition from a web-based solution to the server-based Dispatch Pro and later to Network Function Programmability (NFP). IndiGo opted for a single source for its planning software for ease of integration across its different operations, from crew scheduling to loading and trimming. Often time harmonizing the different parts is the most difficult part of flight operations.
In the second half of 2015 IndiGo made another leap to smoothen its operations by going paperless for its flight operations. Pilots now received two iPad per cockpit. A sense of relief went across staff who could now part ways with the hefty 40-page manual, which was a time consuming exercise and was prone to errors. Data was now readily available through an easy to use interface, allowing for crew to run calculations for different altitudes, runway length and acceleration parameters.
Improving on time performance
Is IndiGo’s on time performance unmatched? Despite the praise the airline has received so far in this article, IndiGo is not the best in class and suffers its own punctuality issues. Over the years it has fallen short from its competitors for a wide variety of reasons. In July 2019, IndiGo’s famed on time performance started to show cracks as its operations expanded rapidly thanks to its aggressive expansion strategy, becoming ever more complex as more planes and locations were added to its operations.
CNBC TV 18 noted that IndiGo’s OTP was experiencing hick-ups due to executive shuffles and the addition of expats to its workforce, who were less familiar with operating a large airline in the competitive Indian aviation market. A shortage in pilots has furthermore dampened the airline’s performance. In November 2023, IndiGo’s OTP was 77.5 percent according to figures published by the The Ministry of Civil Aviation across major airports in Bengaluru, Delhi, Hyderabad and Mumbai. IndiGo came in second, behind rival low-cost airline Akasa Air, who managed to achieve a 78.2 percent rating.
In January 2024, the low-cost airlines on time performance fell to an abysmal 21 percent on the 14th of January. IndiGo was struggling to maintain stable operations due to foggy conditions across its Delhi operations and a passenger hitting one of its captions. The passenger was eventually removed from the airplane by security personnel. On time performance stabilized as time progressed, but IndiGo was far from best in-class compared to its competitors. In October 2024, the airline’s on time performance fell to 54 percent on October 5th due to a systems outage.
In the first days of October 2024, IndiGo performed far worse than its competitors, falling below Air India, who had its own struggles in recent years and below SpiceJet, who managed to improve its on time performance from 71.4 percent on the 1st of October 2024 to an amazing 89.4 percent by the 5th of October. Over the same period, Air India improved its rating from 82.8 percent to 84.9 over the same period. IndiGo meanwhile saw its OTP drop from 74.9 percent to 54 percent, far below its rivals.
Building the IndiGo brand
The growth of IndiGo isn’t a random occurrence. While its network expansion has been crucial in its rapid growth, the commercial has been investing in advertising campaigns to boost its awareness and build a loyal customer base. At its 13th anniversary, IndiGo launched the Let’s IndiGo campaign, featuring a set of color ad creatives highlighting the journeys the airline has been a part of. Creatives featured animated characters, highlighting customer events across its 13 year history.
In the same year, in November 2019, IndiGo launched a dedicated brand campaign to increase awareness for its international flight offering. The campaign, named ‘IndiGo Abroad: Happy to be your first’, highlights the carrier’s flights to China, Turkey, Vietnam among others. The campaign would run across Out-Of-Home, print and social media. Cited by website Agency Reporter, Chief Commercial Officer at IndiGo, William Boulter, said the campaign aims to target customers who are ready for their first international travel destination. With IndiGo starting operations in five new international locations, the campaign aims to improve demand for this new offering.
In February 2020, IndiGo unveiled its partnership with HDFC Bank and MasterCard, launching a co-branded credit card called Ka-Ching featuring its 6E Reward program. The partners expect to onboard 1 million customers over the course of three years. The membership cards, which come at a modest price, would include a variety of customer benefits such lounge access, priority check-in at selected airports, discounted convenience fees and a fuel charge waiver.
In December 2023, IndiGo carried 100 million passengers in a single year, becoming the first Indian airline to reach this milestone. Through this landmark achievement, IndiGo positioned itself among the 10 largest airlines, the carrier said in the press release. In October 2024, data from the Directorate General of Civil Aviation report, cited by Skift, found that IndiGo dominated the Indian aviation market by an impressive margin, claiming a market share of 61.6 percent in May 2024, up from 60.6 percent a month earlier. IndiGo leaves its competitors far behind, with Air India coming in second with 13.7 percent and Vistara with 9.2 percent.
IndiGo’s captures the market
An important factor in IndiGo’s ability to grow to become the largest airline in India has been aggressive expansion through its growing network. In rapid succession the low-cost airline started to add routes to its network, which could be serviced through massive orders at Airbus. As the planes started to reach the various hubs, IndiGo could welcome millions of customers and move them across major metropolitan regions across India and abroad.
The Indian low-cost airline still has grand ambitions. Having nearly capitalized the available aviation market, the airline is looking forward to expanding its operations abroad. In September 2023, the India Times spoke with the freshly appointed CEO, Pieter Elbers, former CEO of Dutch airline KLM, and his vision for IndiGo. The airline has been aggressively expanding its network with international destinations, which will complement its domestic routes. Elbers is confident that the airline will be able to replicate its domestic growth strategy onto its international expansion.
One such expansion has been carving out market share on the busy and lucrative Middle Eastern routes, where IndiGo is now a dominant player. It opened a route to Nairobi, unlocking a gateway to emerging economies in the continent. Transit traffic has been added, allowing for connections between Tbilisi and Phuket through its Delhi operations. Elbers noted that this was in line with the government’s ambitions to turn India into a strategic airline hub. IndiGo meanwhile can ride the wave of the growing Indian economy.
Through partnerships, IndiGo has unlocked new customer segments and offered smoother connections for partnering airlines such as Turkish Airline, with IndiGo customers being able to fly into Europe through Turkish Airlines’ vast network. IndiGo itself is gearing up for long-haul flights into Europe, Elbers said. By adding the Airbus A321 XLR, it will be able to carry customers further to their desired destinations, ranging from Athens and Geneva, to China and Seoul.
The rapid expansion however, will put more stress on the already brittle on time performance of IndiGo, who has seen ratings fall as it has been adding more routes and planes into its operations. Meanwhile, while Elbers is optimistic that airports across India can support its ambitions, the airports are still in the developing phase. In order to support large numbers of travels coming and out, they will have to optimize their immigration procedures, he warns. The necessary infrastructure will have to be put in place to move luggage around and allow for easy boarding for connecting passengers.
