IndiGo, with an impressive order backlog of close to 1000 aircraft, is gearing up to establish a strong network amidst fierce competition in the airline industry. In conversation with businessline, Abhijit DasGupta, Senior Vice-President of Network Planning & Revenue Management at IndiGo, shares insights on their focused approach. He sheds light on how they plan to enhance their network, increase revenues, and ensure cost efficiency in challenging times. Join us for a candid discussion on IndiGo’s strategic vision for a successful future.

Q

Over the past 24 months, IndiGo seems to have managed to dodge multiple issues, including Covid and supply chain problems, better than its competitors. What worked?

Frankly, we’ve had the advantage of a strong balance sheet and a well-planned network, safeguarding us from massive layoffs or fleet disruptions. This financial stability allowed us to conduct experiments like deploying the unused fleet to smaller Indian destinations and operating international flights through travel bubbles. Currently, 40 per cent of our city pairings reflect the success of these ventures. Furthermore, this month marks a milestone this month we have crossed four digits on our sector, which means, 1,000 nonstop sectors connected… 500 routes on a non-stop basis.

Q

What is the expansion opportunity that the airline sees ahead of the winter schedule?

During Covid, we faced an unprecedented challenge, rebuilding the airline from scratch. Now, we serve 108 destinations with 500 round-trip routes overall. Though growth percentages might stabilise, the absolute number of opportunities will continue to rise. Expanding network breadth and depth, adding frequencies, introducing non-stop connections and venturing into new markets have immense potential for us.

Q

Will IndiGo continue to rely on codeshares or build its own network?

Both. Codeshares are mutually beneficial for both airlines. We can’t tap into smaller opportunities without partner airlines. Having said that, we continue to explore adding international destinations on our own as well.

Q

With Air India having a robust domestic and international network, wouldn’t customers prefer a non-stop flight with them over a multi-stop option with IndiGo?

Yes, there will be some markets that will require two stops and, therefore, will carry lesser traffic flows. However, there will be a magnitude of markets that we’ll create as one stop. It is always about tapping into the small trickles of traffic flows and aggregating them into large pipelines. So yeah, the approach that we take may create a two-stop, but will create a one-stop to 50 other locations.

Q

Does the delay in A321XLR impact your plan?

We are in continuous contact with the OEMs (original equipment manufacturers) on our fleet delivery plans and are designing our network rollout plans in an integrated process. We have several viable scenarios for fleet deployment for all our upcoming aircraft types and configurations. Therefore, we have the ability to adjust the network solutions to adapt. That said, we are not currently anticipating any material change to our primary network design for the XLRs (extended range) at present.

Q

Jefferies’ report stated that while IndiGo’s RASK (revenue per available seat kilometer) has improved, the yield could see a 5 percent y-o-y dip in FY24 and FY25. Your comments?

To be sustainably profitable, our focus is on maximising the revenue opportunity, rather than specifically the yields. Over the last couple of years, our revenue performance has enabled us to improve profitability, and that remains the intent going forward. The outcome of this effort on the specific element related to yields may change due to the factors mentioned above and a mix of markets and other extraneous factors. Besides, we’ll always keep chasing the ‘next five paise’ to reduce costs and increase our RASK.

Q

Do you think the high-speed rail network of Vande Bharat will have an impact on short-haul domestic travel?

Air travel and high-speed rail can coexist and complement each other, serving different travel needs and preferences. The choice between the two ultimately depends on factors such as distance, time constraints, accessibility, infrastructure, specific routes, and individual traveller preferences. We were always focused on connecting India’s large, mid-size and small cities as and when we see an opportunity. Given the consumption potential in the market in the years ahead, we do not believe that it will have a negative impact on our growth objectives as we continuously adapt our network to these evolving realities.