ANALYSIS: India’s Indigo Gaining Market Share During Pandemic
Indian carrier Indigo appears set to increase its lead in India’s domestic market, because it is receiving aircraft on order, while data shows its nearest competitors are lagging well behind on pre-COVID capacity levels.
Data from India’s Directorate General of Civil Aviation (DGCA) shows Indigo operated 72 percent pre-COVID capacity in December as compared to: SpiceJet at 55 percent, Air India 55 percent, TruJet 60 percent, Air India’s turboprop regional airline Alliance Air at 61 percent, GoAir 63 percent, AirAsia India 66 percent and Vistara 67 percent.
The only airline operating at higher capacity, than pre-COVID levels, is the 115 percent achieved by Star Air, a small regional airline that has been adding pre-owned Embraer ERJ-145s and serves mostly UDAN-Regional Connectivity Scheme (RCS) routes.
Indigo is India’s largest domestic airline. It was expanding internationally prior to COVID, but has since refocused its growth efforts on the domestic market.
Last year it received 40 Airbus A320neo aircraft, making it the airline in the world that received the most aircraft in 2020 from Airbus, Indigo chief commercial officer, Willy Boulter, told Smart Aviation APAC in January.
He said the airline has just over 150 Airbus A320/321Neos, 60-70 Airbus A320-family CEOs and 25 ATR 72s. Industry sources say some of the A320 Neos it has been receiving are to replace older A320s coming off lease.
Indigo strives to operate a young fleet, because younger aircraft have lower maintenance costs. It is also known to be an airline that buys aircraft in bulk from aircraft manufacturers so it can achieve a lower purchase price for each aircraft and then seek to do sale leasebacks with lessors where it can gain an immediate profit from the aircraft sale.
There are limits to how far Indigo can expand A320-family capacity on trunk routes in the immediate term, because the Indian authorities have forbidden Indian domestic carriers from increasing capacity beyond 80 percent of pre-COVID levels until 30 March, in an effort to minimize the spread of the COVID-19 virus.
But the government has exempt the capacity caps from UDAN-RSC, routes to remote areas such as the northeast which are under-served.
Indigo has confirmed publicly it plans to receive around 10 ATR 72-600s this year. UDAN-RSC routes are generally served with turboprop aircraft.