IndiGo: An LCC with
no limits? — August 2023

IndiGo is in an enviable situation. The leading Indian airline, operating in the world’s fastest growing economy with a strong technological bent (highlighted by the recent lunar landing), IndiGo has an established LCC model, a dominant market share and inherent advantages over the local competition. It is Airbus’s most valuable customer having just placed an order for 500 A320/21 neos.

IndiGo’s roots can be traced back to 2005 when the Indian regulators started to ease their grip on the domestic market and began to understand that protecting Air India was not in the best interests of the country. At that time Rahul Bhatia, head of the InterGlobe tourism, air transport and technology conglomerate, was part of a consortium aiming to launch India’s first LCC, using the AOC of a grounded carrier (Royal Airways). The consortium (by the way, advised by members of Aviation Strategy who developed a detailed operational and financial plan) succeeded, establishing India’s first LCC, SpiceJet, in 2005. But by then Rahul Bhatia had split away with a very similar plan for IndiGo which started up the following year.