Lead Story

Flying Into Uncharted Territory

IndiGo dominates the Indian skies, but its tried-and-tested strategy may not work internationally

PTI

On the face of it, IndiGo is sitting pretty. With a handy 40% market share and a route connectivity that its rivals would give their right engine or CEO for (in fact, GoAir just ended up doing the latter), coupled with an incredibly tight-cost structure, IndiGo is in cruise mode. The airline has been around for a little over a decade and managed to come up trumps where most players have succumbed to either strategic mistakes or financial woes.

While the others grapple to sustain market share, IndiGo is making its next move. India’s most profitable carrier is going long-haul, which means it will now be up against much tougher competition, who have not just years of experience but also deep pockets and very solid customer loyalty to back them. From being the big daddy in domestic, it will once again need to settle into the familiar role of the challenger. 

It’s not as if IndiGo does not have a presence in international markets. It already has flights to the Middle East and destinations in Southeast Asia such as Singapore and Bangkok. The plan now is to push that to Europe and the US as well.

Owners Rahul Bhatia and Rakesh Gangwal better keep their fingers crossed. For long-haul has decimated the coffers of many an airline in the US and Europe. Closer home, AirAsia tried the long-haul budget airline approach with AirAsia X, which came a cropper. The reasons for failure in long-haul range from overestimating the market size and choosing the wrong routes to the airline’s inability to provide crucial last mile access to its passenger. That apart, airlines such as Emirates and Singapore, who did not have a strong domestic market, successfully became international hubs. Both these airlines, apart from having state ownership, had a presence across the value-chain — owning the airport and airline. Dubai, in particular, had the locational advantage of being a Middle Eastern hub. Though Singapore is not the most conveniently located (Bangkok is), they made it up with high-quality infrastructure and good connectivity. Both the airlines also had the advantage of a clear long-term vision of 10-20 years, thanks again to state support, unlike a host of other private players.

In a scenario, where instances of failure is well in excess of success, IndiGo has its task cut out. It is a far cry from the time it entered the

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