IndiGo made history in the week starting April 7 by momentarily surpassing global giants Delta Air Lines and Ryanair to become the world’s most valued airline. This capped a series of headline-grabbing moves over the years since it took to the skies. The most significant was in mid-2023 when it announced non-stop flights to four Central Asian cities, not usual travel destinations for Indians and not connected by an Indian carrier till then. Within months, these destinations recorded triple-digit growth in the number of Indian visitors.
To meet the growing demand, IndiGo had to prioritise fleet allocation to Baku, Azerbaijan; Almaty, Kazakhstan; Tbilisi, Georgia; and Tashkent, Uzbekistan. Baku registered 283% traffic growth from India in January-September 2024 compared to the same period in 2023. It was followed by Almaty (172%), Tbilisi (147%) and Tashkent (90%).
Bolstered by the response, IndiGo talked about starting direct flights to international cities not served by a domestic carrier and announced in earlier this year that it would connect four new destinations: Krabi, Thailand; Manchester, UK; Seychelles; and Fujairah, UAE. In fact, even global carriers do not fly directly between Delhi and Manchester, IndiGo’s second European destination after the Netherlands. With leased wide-body aircraft, it is set to announce 10 new international destinations this year.
Indeed, after capturing 60%-plus domestic market share, IndiGo has set its sights on dominating the global skies too, including mid- and long-haul markets such as northern Europe, the US, Canada, Australia and Japan. Air India is the only domestic airline that connects these countries. This sets the stage for an epic battle between Air India, which has a monopoly on long-haul routes, and IndiGo.
For IndiGo, the opportunity is too big to be missed. Around 26 million passengers flew on long-haul routes from and to India in FY24 and generated $16 billion in revenue. But the share of Indian carriers on long-haul routes (only Air India) was just 21%. “This contributes more than 50% to Air India’s revenue,” Nipun Aggarwal, Chief Commercial Officer, Air India, said recently. For IndiGo, international is believed to have contributed about 25-30% of revenue in FY25.
Clearly, international has big margins, and growth. The international passenger traffic for Indian carriers is expected to grow by 15-20% in FY26, more than the 7-10% growth expected in domestic, says an ICRA report. The total international traffic from/to India rose 11.4% to 5.7 million in the first nine months of FY25. The international traffic for Indian carriers also rose 11.4%.
The Airports Council International says India is likely to be the fastest-growing large aviation market over the next three decades. But there is a paradox; it is among the few big countries where domestic airlines are not leaders on international routes. The market share of foreign airlines on global routes has been 55-60% over the last three years. IndiGo has 20% share of India’s international seat capacity, with Air India (including Air India Express) at 24%. It plans to change this by deploying 40% capacity on the international sector by 2030, up from 28% at present.
Taking On Air India
The huge potential means Indian aviation players are going all out to capture the long-haul market. CEO Pieter Elbers’ ambition to make IndiGo a global airline by 2030 means taking on Air India, which itself is in the middle of a five-year transformation.
IndiGo plans to break Air India’s dominance of long-haul routes with its order for wide-body A350s and longest-range narrow-body A321 XLRs. The first of the A350s (30 ordered) is set to be delivered by FY28 and will allow it to fly to North America. A321 XLRs, expected in FY26, will give it the option to fly non-stop to the UK, the second-largest international market for Air India after the US. But this may come with a payload restriction.
Both Air India and IndiGo plan to aggregate passengers from Southeast Asia, Far East and SAARC at their hubs before flying them to long-haul destinations. Mayur Patel, Head of Asia, OAG Aviation, says IndiGo is well-positioned to capture a share of Air India’s international market, particularly on short to medium-haul, price-sensitive routes. “While Air India focuses on premium long-haul travel, IndiGo’s low-cost model appeals to high-volume segments like leisure. Over the next two-four years, IndiGo is expected to steadily expand in regional markets and challenge Air India on select long-haul routes,” Patel tells BT. OAG is a global aviation data provider.
The Market
IndiGo’s secret sauce will be innovative pricing, a young fleet and new aircraft, say analysts. It is likely to offer its premium Stretch product with flat beds, in-flight entertainment, hot meals and alcohol. It is already a leader in regional international—Middle East and Southeast Asia. International operations (it flies to 41 destinations and has added 15 in last two years alone) contribute 20% to revenue with half coming from the UAE and Saudi Arabia. It now wants to connect Europe, North America, Australia and the Far East. To test the waters, it has announced the deployment of three leased B787 aircraft to Europe this summer. The stock has risen about 22% in 2025 till April 22, when it closed at Rs 5,535 apiece.
On the international sector, it will offer benefits such as redemption of points for flight tickets, upgrades, priority check-in and lounge access. Also, once it becomes a member of any alliance, its customers would be able to use lounge access of partners.
The question is, can IndiGo thrive in the competitive international market? Experts say it’s unlikely to be a smooth ride with Air India also augmenting capacity, services and connectivity in the international sector. Then there are foreign carriers eyeing a bigger pie of the Indian market.
Rahul Bhatia, Promoter and Managing Director, IndiGo, says if you have cost leadership and can keep reducing costs, you can stimulate demand, fill planes and then order new planes; and that cycle goes on. “If you offer people air transportation at the right price point, they will move. If we move just 1% people travelling by train to planes, that will be a very large number. Just think of the number of aircraft you will need in India,” he says.
Go Global Strategy
IndiGo’s international growth started after the airspace re-opened post-Covid. The airline executed a major international expansion in 2024, launching 24 new/resumed international routes with 292 weekly flights. A vast domestic network, lower costs and a growing fleet can help IndiGo offer affordable travel, especially for price-sensitive first-time flyers from non-metros. It has emerged as the world’s second fastest-growing airline after Qatar Airways in terms of seat capacity, which increased 10.1% in 2024, according to OAG. It has placed one of the world’s largest orders for 950 aircraft.
India’s international aviation market has three segments—regional international, to Middle East and Southeast Asia; mid-haul, covering parts of Europe, Africa; and long and ultra-long haul, to US, Canada, Australia and Japan. IndiGo already has a vast network in regional international. Air India operates to 42 destinations in 31 countries, including the US, the UK, Canada, Europe, Asia, Africa and Australia. The US is a key market for the airline. It operates 34 weekly flights to various cities in the US.
IndiGo will focus on London, Paris, Frankfurt, Spain and Italy to the west and Japan, Vietnam, Thailand and Singapore to the east, say analysts. They also expect a deeper foray into Africa, as Air India no longer operates to major destinations there, barring Nairobi. “IndiGo is the gold standard for low-cost platforms. The introduction of the premium class on international at a significant discount to traditional business class will stand them in good stead,” says Sanjay Lazar, CEO, Avialaz Consultants. He says IndiGo has monopolised almost 70% routes in Tier II/III cities. This will make it easier for it to connect domestic and international routes.
The airline’s network map shows extensive coverage of South Asia, Southeast Asia and the Middle East, with notable connectivity from multiple Indian cities. In 2024, it launched 92 direct international flights from Bengaluru, followed by 42 from Chennai. Bengaluru was connected to Mauritius, Langkawi, Jeddah, Bali; Chennai to Penang; and Hyderabad to Male, Colombo and Abu Dhabi. The airline is also using capacity from non-metros cities—Bhubaneswar to Singapore, Bangkok, Dubai; Pune-Bangkok, Surat-Dubai, Chandigarh-Abu Dhabi and Coimbatore-Singapore.
Abhijit Dasgupta, EVP, Network Planning and Revenue Management, IndiGo, said in a recent interview to an aviation blogger that IndiGo is evolving into a hybrid “value carrier” and is no longer a pure low-cost carrier airline. “It combines cost-efficiency with select premium offerings like flexi fares and international partnerships, targeting price-sensitive but experience-conscious travellers. This positions IndiGo as a competitor to budget as well as full-service carriers,” he said.
The Long-Haul Test
The expansion into the US and Canada will require IndiGo to drastically rework its strategy as current operations support five-six hours connectivity. CAPA India Director and CEO Kapil Kaul says long-haul routes are a different game for which IndiGo will have to get the right cost structure, product, distribution and aircraft. “As you fly long and ultra-long-haul, some of the cost efficiencies that you see in domestic and short-haul international operations will not be the same. The product will play a very important role,” says Kaul.
Market experts say IndiGo will keep cost as competitive as possible to Air India. Lazar, who has been closely tracking IndiGo’s growth, says it will expand the domestic “Stretch” product into a more luxurious “Premium Stretch” product for the A321 XLRs and eventually the Airbus 350s, possibly even with in-flight entertainment, lie flat seats, gourmet hot meals and even alcohol. “We have long held that for Indian carriers, North America is the Holy Grail, whether it was Jet Airways, or Air India and IndiGo. The eventual goal of 6E will be long hauls into the North American continent, probably with a one-stop solution, and eventually maybe ultra long-haul flights when the A-350s get delivered in late 2027/2028,” he says.
Jitender Bhargava, former executive director, Air India, hopes IndiGo does not repeat the mistake made by Jet Airways when it started international operations. “Naresh Goyal (Jet founder) launched flights on sectors where Air India was operating.” Air India will be in a commanding position under the Tatas, he says. “They will continue to improve product quality as new aircraft are inducted, legacy issues are overcome and crew become better trained. For the US, IndiGo should choose cities that are different from the ones Air India flies to keeping in mind that the Indian diaspora is huge there.”
Patel of OAG says as IndiGo continues to evolve into a value-based carrier, its long-haul strategy is expected to focus on a point-to-point model that combines affordable pricing with a segmented product offering tailored to diverse needs.
IndiGo’s long-haul moves will spice up the competition with Air India and other carriers. Elbers says it “will keep both airlines on their toes.”
Long haul has better margins and high load factor (80-90% in case of the US). “Air India has built a long runway into the North American continent. It currently operates about 63 flights weekly into North America (USA/Canada) with plans for at least three more gateways soon at Dallas, Los Angeles and Seattle/Boston. IndiGo will take three years to get its long-haul aircraft. Then, it has to wait until it has the scale to cross these numbers, possibly by 2030, unless they focus deeply on one-stops to the US,” says Lazar. However, the delivery of XLRs and wide bodies may soon help IndiGo overtake Air India in the international market in terms of routes served.
Gagan Dixit, Aviation Analyst at Elara Securities, says long haul is lucrative, but Air India has the legacy advantage of slot availability at some big airports such as London’s Heathrow and New York’s Kennedy. “It would be tough for new entrants like IndiGo to get those,” he says. Air India has not focused much on the regional international but is now remedying that via Air India Express. Under its five-year transformation plan, launched in 2022, Air India is gearing up to capture a higher share of the international sector by introducing newer aircraft, retrofitting existing aircraft on international routes, optimising network and improving connectivity options. It has placed orders for 570 aircraft. Lazar says service levels will always differ on Air India and IndiGo in the long-haul segment as the former is a full-service carrier with all the bells and whistles.
Air India’s expansion has slowed due to various reasons. CEO Campbell Wilson recently said supply chain issues at Boeing and Airbus are impacting turnaround plans. “In response, Air India is modernising existing fleet, optimising operations and working closely with manufacturers to manage delays, while staying focused on long-term global growth,” says Patel.
Experts expect new dynamics to take shape once Air India and IndiGo start flying newer aircraft to the US and Europe. “It’s good Indian carriers have realised that this is our market. You will see international becoming a big story,” says Kaul. He says competition on international, particularly long- and ultra-long-haul segments will intensify going ahead. “The competition between IndiGo and Air India is going to be less intense than the competition from international carriers who have an interest in the market,” he adds.
Opening of new international airports in Noida and Navi Mumbai is also expected to provide opportunities for regional international expansion. Sanjay Kumar, IndiGo’s former Chief Commercial Officer, says Air India currently has an upper hand on premium long-haul routes. “After the Tatas’ takeover of Air India, we are slowly seeing the much-needed improvements with new and refreshed fleet and better products and services. But as far as the domestic economy product/short haul is concerned, as long as you know that the aircraft is clean, seats are comfortable, and network and operations are great, customers don’t care for either in-flight entertainment or the miles,” he says. Bhargava says IndiGo’s domination of the domestic market was facilitated by the collapse of some of the bigger airlines such as Sahara, Kingfisher, Jet Airways and Go First. A similar opportunity is unlikely to come IndiGo’s way on international sectors, he says.
However, Kumar has a different take. He says it took time for IndiGo to become profitable because there was huge competition. Better long-term plans with strict cost controls and execution worked in favour of IndiGo. “What is more important is that with traffic growth, matured market fares and virtually no competition other than Air India, there is no other domestic carrier better placed than IndiGo to take advantage of what has been done in the short-haul market. Once IndiGo starts getting into wide body operations, two things will happen—one is the experience of the customer with new aircraft and second is connectivity to and from even Tier II/III/IV cities,” he says.
The Challenges
Profitability is the key to a successful operation. Lazar says that is the only challenge he foresees in IndiGo’s international glide path. “Ensuring low operating cost and profitability on wide-body operations will be a challenge but I’m confident that their DNA of operational discipline will help them succeed,” he says. Another issue is securing slots for long-haul operations, particularly at high-demand international hubs where availability is limited. Access to high-demand slots at congested airports like Heathrow, Dubai, and JF Kennedy is limited and expensive, curbing network planning for Indian airlines.
“However, the emergence of new and expanding airports in India presents opportunities to secure slots domestically and position itself strategically for long-haul growth. This aligns well with the upcoming deployment of its damp lease on Boeing 787 and introduction of the Airbus A321 XLR fleet, enabling the carrier to expand international operations in a cost-effective manner,” says Patel. However, policy challenges such as restrictive bilateral air service agreements, lack of a comprehensive open skies policy, high domestic operational costs, slow regulatory approvals and airspace and geopolitical issues can limit international expansion and competitiveness, he says.
There has been pressure on the Indian government for opening bilateral rights from Middle Eastern carriers which want to reap the benefits of the vast Indian market. Bilaterals are expected to be opened soon, but Kaul says one needs to see what kind of profitability both Air India and IndiGo derive from flying to Europe and the US. “With bilaterals being opened, and probably Russian air space as well, you will have more US carriers flying non-stop to India. So, profitability will have to be seen, but as far as the market share is concerned, there is enough for both, at least in the near term,” he says.
Indian domestic carriers are up for a competitive battle. Can IndiGo repeat its domestic success story in foreign skies?
@richajourno
