'India Needs More Than 2 Airlines'

'Just look at China: They have five or six major airlines and some smaller ones.'

India deserves more than just two major airlines, and IndiGo's market share domination is not entirely of its own volition, as certain airlines have fallen by the wayside, said IndiGo Promoter and Managing Director Rahul Bhatia on Monday.

He also said that IndiGo will never be found guilty of "gouging" its customers and welcomes competition with the right cost structure.

Amid financial struggles, Jet Airways went bankrupt in 2019, and Go First went insolvent in 2023.

In the first quarter of 2024-2025, IndiGo held a 61 per cent share of the Indian domestic passenger market, while Tata-run Air India Group -- including Vistara -- held a 28.7 per cent share.

"We welcome competition. A country like India deserves more than just two airlines. Just look at China: They have five or six major airlines and some smaller ones," Bhatia told reporters at an event where IndiGo launched its frequent flyer loyalty programme Blue Chip.

IndiGo's business class, called Stretch, will feature 12 seats in a 2-2 configuration on A321neo planes.

The first flight with business class will operate on the Delhi-Mumbai sector from mid-November, gradually scaling up to most metro-to-metro routes.

The airline plans to serve 12 routes with business class by the end of 2025.

"We are often held guilty of our market share, and nobody spends the time to understand that this market share was not entirely IndiGo's doing," Bhatia said.

"Some of our growth was of our own volition, but some of the growth came because a few other airlines fell by the wayside. That offered us the opportunity to grow into that space."

If an airline does not have the right cost structure, Bhatia said it will struggle sooner or later.

"We welcome competition with the right cost structure, but the last thing we want is to be held guilty of being a duopoly. We understand our responsibility as a service provider to customers," he noted.

"I would like to say formally that IndiGo will never be found guilty of gouging its customers.

"Our business is to keep our costs low, provide affordable fares, fill up planes, buy more planes, fill them up again, and keep that cycle going," he added.

Bhatia and family currently own about 36 per cent of IndiGo.

In a rare moment, Bhatia got emotional during his speech at the event, stating, "IndiGo and I are here to stay."

He was responding to market speculation in June when he sold 2 per cent of his shares in the airline for about Rs 3,400 crore (Rs 34 billion) to fund his other businesses.

While talking to reporters, he also explained the airline's logic for turning away from the typical low-cost airline model.

"People cite examples of Southwest, RyanAir, and EasyJet to me. Southwest is the low-cost airline in the US, and that country has seven other airlines operating flights globally. Southwest has enough opportunities in that country."

"RyanAir is similar. They are big in Europe, and they don't want to be in the long-haul market because you have every airline (Lufthansa, Air France, etc) flying long-haul flights. The same is true for EasyJet," he explained, adding that all this cannot be superimposed on the Indian market.

"In India, we have one long-haul carrier. There is no way on planet Earth that this is sustainable. We certainly want to play in that market," he said.

He said that even that one carrier (Air India) is not carrying a huge share of the long-haul traffic to and from India.

"It is these other carriers -- which do not belong to the country -- that are carrying a lot of traffic," he added.

Indian carriers have about a 45 per cent share in the overall international passenger market to and from India, while foreign carriers hold the remaining 55 per cent share.

In the long-haul market, which includes flights to destinations such as North America and Europe, the share of foreign carriers is even higher.

Feature Presentation: Ashish Narsale/Rediff.com