It was the 4th of August, 2006, when a brand-new Airbus A320 took to the skies from Delhi airport. The first destination was Guwahati, and the aircraft then flew onward to Imphal. The airline was named IndiGo, and it took off with a focus on inter-India destinations.
The journey of its parent company—InterGlobe Enterprises—had begun back in 1989, a few years before the first wave of reforms unleashed private-sector entrepreneurship in India. The ambition of the founders was evident. They booked as many as 100 aircraft of the same type—the Airbus A320 family—set affordable fares and offered the pioneering feature of booking air tickets on mobile phones. The service was slick, and the livery was all dyed indigo.
Five years after its first domestic flight, IndiGo went international. On September 1, 2011, flight 6E-021 took off with 170 passengers from Delhi to Dubai. Today, in its 19th year of operations, the airline is the dominant force in Indian skies, with a market share nearing 65%. Its original business model of low-cost fares with no-frills (charging for seats, meals, excess baggage) set a benchmark. Operating a single aircraft type keeps maintenance simple, a point-to-point network reduces layover times, and the sale-and-leaseback model has helped maintain a lean balance sheet. IndiGo’s rise to aviation glory was also aided over the years by the collapse of four rival airlines and an anaemic state-run carrier that has only recently returned to its original owner.
Yet the fair winds of competition are picking up. The airline is now setting an ambitious international flight path. As Richa Sharma details in the cover story of this issue, IndiGo is taking the fight to Air India, currently the only Indian airline dominating long-haul international routes. The overseas market is sizeable—Air India earns around half its revenue from serving overseas destinations.
Why is this battle being watched so closely? Because while India is projected to become the fastest-growing large aviation market over the next three decades, it remains one of the few major countries where foreign airlines still dominate international routes, controlling nearly 60% of the market. Given their track record, IndiGo CEO Pieter Elbers’ claim that the airline will be a global aviation giant by 2030 doesn’t sound like an empty boast.
Elsewhere in this issue, Krishna Gopalan writes about Shree Cement, India’s third-largest cement company, which is now less than six months away from achieving 68 million tonnes per annum of capacity—a far cry from the existential crisis it faced back in 2000. Chairman Hari Mohan Bangur says, “India’s cement industry will double in the next decade.”
What really stands out is this confidence in the India growth story. An airline CEO and a cement company chairman, both betting big on the India opportunity.
All that may be needed is for policy and regulation to just stay out of the way.
