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Mint Explainer: IndiGo adjusts flight path. Tailwinds or headwinds?
Summary
- The revival of air traffic following the lifting of covid restrictions was one of the factors that led the airline to introduce these features.
IndiGo, India’s largest airline and one of the world’s biggest low-cost carriers, has introduced business class seating and a loyalty programme – offerings that are typically provided by full-service airlines.
Mint explains the rationale for these moves and what it entails for the future of IndiGo and the Indian aviation ecosystem.
The trigger
After covid-related restrictions were eased in May 2020, India’s aviation ecosystem recovered strongly. The visible signs of an expanding economy, a growing middle class, and higher disposable income were credited with for boosting travel across metros and smaller cities.
Also Read: IndiGo will always remain a low-cost airline: Rahul Bhatia
The potential of growing air traffic was one of the key drivers for airlines to place large aircraft orders since 2023 – Air India (470 aircraft), IndiGo (500), and Akasa (150). According to IndiGo, along with this growth came a change in the profile of travellers and increased demand for a business product.
“We have seen a lot of changes in the market and our customers," IndiGo chief executive officer Pieter Elbers told Mint on Monday at the celebratory event of the airline’s 18th anniversary. “If you listen to your customers, you feel that in flights like Delhi-Bengaluru or Mumbai-Delhi, there is such an increasing demand for a business product that we felt that it was the right moment to make this move."
Business class
The sale of business class seats on the New Delhi-Mumbai route for travel from 14 November started Tuesday. The fares start at ₹18,018.
Data from travel portals show that competitors Air India and Vistara are selling their business class seats on the route for mid-November at fares ranging from ₹26,000 to ₹50,000.
IndiGo’s business class promises premium seating, headrest, five-inch deep recline, electronic device holder, 60-watt USB-Type C power supply, and three-pin universal power outlet. The fare will include a complimentary vegetarian meal box with a choice of beverages, advance seat selection, priority check-in, and anytime boarding.
Also Read: IndiGo working on better automated responses to complaints, queries
It remains to be seen whether passengers will miss the hot meals and in-flight entertainment that the competition offers in business class.
IndiGo aims to expand the business class product availability on the busiest metro routes in India by the end of 2025. Industry executives are of the opinion that this experience in the domestic segment will help the airline in crucial learnings about its product before it inducts the A321 extralong range for international destinations within a 10–11-hour radius from India and also for the long-haul routes when it inducts the Airbus A350 aircraft.
“This will tell IndiGo what works and what doesn't, and they may gather a lot of data on the basis of customer feedback to decide on the next phase of their business class product or full-service airline aspirations," an airline executive said.
Loyalty programme
The consistent growth of corporate flyers with IndiGo was one of the catalysts for the BluChip loyalty programme introduced by IndiGo. Since 2023, corporate flyer traffic has risen to as much as over 50% on several of IndiGo’s busiest routes.
The seeds of the loyalty programme at IndiGo were sown in 2019, but the onset of the covid pandemic in early 2020 forced the airline to put such plans on the backburner. After a strong revival in corporate traffic, the airline decided in 2022-23 to revive this loyalty programme.
Pre-registration for the BluChip programme has started with an expected launch in September. Members will accumulate IndiGo BluChips on every flight, based on their spending, and up to five nominees can redeem a member’s accumulated benefits.
“IndiGo of tomorrow is going to be very different than IndiGo of 2006 or today. The business class entry is clearly to tap the segment, which sees lower capacity now than what it was until 2019 with Jet Airways in operation," said Ameya Joshi, founder of aviation research platform Network Thoughts.
