India's largest airline IndiGo (InterGlobe Aviation Ltd), which offered low-cost all-economy seats so far, has announced the launch of ‘IndiGo Stretch’ business class.
The airline, which started in 2006 with 100 aircraft in the pipeline, now has a fleet of over 380 aircraft and expects to receive more than 970 aircraft over the next decade.
Mint spoke to the airline's promoter and managing director, Rahul Bhatia, about the airline's journey and what lies ahead as it enters the next phase of business with long-haul operations and business class seats.
Bhatia, who holds a bachelor’s degree in electrical engineering from the University of Waterloo, entered air transport management with IndiGo’s parent company, InterGlobe, in 1989. He co-founded IndiGo in 2006 with Rakesh Gangwal. However, the partnership fell apart in 2019. In February 2022, Gangwal resigned from the board as a non-executive, non-independent director. As of June, he has decreased his shareholding in the airline to 19.4% from 36.7% in 2019.
Rahul Bhatia-headed InterGlobe Enterprises is IndiGo's largest shareholder. After selling 2% stake in June through a block deal for over ₹3,360 crore, the promoter group led by Bhatia is left a 35.91% stake in the airline.
Addressing concerns about his reduced shareholding, Bhatia reiterated: “InterGlobe and I are here to stay.”
Edited excerpts:
It has been an interesting journey. It has had its ups and downs. This is my view despite the fact that we thought we had a great start, in 2008, when the fuel prices spiked, we were at the brink of bankruptcy. We came out of that and life was good for several years. Of course, then covid arrived, and we had to deal with that. It has been a journey that has had many different colours to it.
It will always be a low-cost airline. People use the word ‘low-cost’ quite loosely. Low cost is anything that you do, you have to make sure you have the lowest cost structure in the industry, and I don't put that in the context of India, I put that in the context of the world. And so, when we launch a new product like the one we launched today, it doesn't move away from the theme of our low-cost airline.
Of course, there is a lot of execution, and I want to recognize the efforts of tens of thousands of people in the company to build what we have, but it is also a little about being at the right place and at the right time. A company that has a good cost structure will grow on its own. We are also privileged with the country we live in. One other thing is that planes are planes, hardware is hardware, and it is the same plane different companies fly, but we do try very hard at IndiGo to create a special soul and spirit amongst our employees, and I really think that differentiates success from failure.
Indian aviation, when it comes to flying internationally, has never fired on all four cylinders for several different reasons—prior government policies may have played a role in it. But, I do think the current disposition is very supportive of Indian airlines going to the world.
I think, it is time that we bring some of that economical wealth that sits outside of the country—a lot of foreign carriers are flying customers from India to the world, and I think that economic opportunity has to be brought back to this country, and I really do believe that between Air India and ourselves we will do what it takes to bring all of that back.
