Skift Take
IndiGo’s strategy shake-up is evident as it moves from low-cost basics to premium offerings, with business class, wide-body aircraft, and now in-flight entertainment.
To cater to a digitally-savvy India, low-cost carrier IndiGo announced significant digital upgrades to its website and mobile application Friday. As part of this initiative, the airline also looks to introduce in-flight entertainment accessible through the IndiGo app.
News of the in-flight entertainment comes after the carrier announced the introduction of a business class in the previous earnings call in May and the placing of the first-ever order for widebody aircraft in April.
CEO Pieter Elbers revealed that the “on-app entertainment” is currently being tested on one specific route — the Delhi-Goa sector.
A Digitally-Savvy India
Speaking at an earnings call on Friday, Elbers also shared that IndiGo has introduced WhatsApp as a communication channel through the launch of an AI booking assistant — 6Eskai. “Part of the digital journey is being where our customers are,” Elbers said. “We increasingly see our customers online, and therefore, we are exploring these new channels.”
During the earnings call, Elbers reiterated the airline’s ambitious plans. “By the end of this year, we’ll introduce a business product on the country’s busiest routes. Next year, we will have the XLR coming in, and by 2027, we will have wide-body aircraft in operation. By 2030, we aim to double in size.”
Elbers emphasized the importance of testing the “on-app entertainment” to enhance the digital experience of customers. “India is becoming a digitally savvy nation. We’re testing this on one route, where passengers can view movies, play games, and access geographical functions.” He noted that customer feedback has been encouraging, and a broader rollout decision will follow based on these insights.
Aircraft Situation
IndiGo’s fleet, as of June 30, includes 382 aircraft, with 14 on finance lease and 18 on damp lease. Pending regulatory approvals, the airline plans to add six more aircraft from Qatar Airlines for the Doha route on wet or damp lease in the coming quarters.
Addressing the issue of grounded aircraft, Gaurav Negi, the chief financial officer, reported that the current count remains in the mid-70s. “We are working with Pratt & Whitney and expect the grounding to start reducing towards the start of next year.”
In the first quarter of the fiscal year (April – June 30), IndiGo inducted 15 aircraft, including eight from its original order book and seven through damp and secondary leases. “We will continue to diversify our sources and add more aircraft on finance leases,” Negi said.
Elbers highlighted the growth potential in the Indian market, particularly in international air travel. “There’s a buoyant market out there, hand-in-hand with the growth of the Indian economy.” IndiGo has added 30 new routes year-over-year, bringing the total to over 540.
To meet growing demand, the airline will enhance its international capacity deployment to Central Asia. From mid-August, IndiGo will fly daily to Tashkent, Almaty, and Tbilisi. The airline plans to add more destinations and frequencies in the coming quarters to achieve early double-digit growth in fiscal 2025.
“We have the Airbus XLR joining our fleet next year, allowing us to reach Southern Europe and further into Asia. The Airbus 350-900 will follow to further expand our range,” Elbers added.
Profit Falls 12%
Despite reporting its seventh consecutive profitable quarter, IndiGo faced a 12% drop in net profit to INR 27.3 billion ($326 million) for the quarter ending June 30, 2024, from INR 30.9 billion ($369 million) the previous year. Analysts had anticipated a steeper decline. Revenue from operations increased by 17.3% to INR 195.7 billion ($2.34 billion).
Compared to the same period last year, IndiGo’s capacity rose by 11% to 36.3 billion, passengers increased by 6.2% to 27.8 million and the load factor decreased by 1.9 points to 86.7%.
