IndiGo keeping a 'close eye' on Saudi Arabia market amid rapid international expansion

IndiGo, India’s largest airline, is monitoring developments in the Saudi Arabian travel market for potential growth opportunities, even as it focuses on international expansion in Europe, South East Asia and Central Asia.

The low-cost airline is also considering introducing its business class product on flights to Abu Dhabi and remains confident in the region's continued travel demand growth despite geopolitical flare-ups, its chief executive Pieter Elbers told The National.

"We need to see how Saudi Arabia will develop in terms of a travel market, projects, construction work and everything that's happening there, so we keep a close eye on that," he said.

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"There's always a bit of a chicken and egg [situation]: It's either going to be the flights first or the development first," he added.

IndiGo has a 64 per cent share of the Indian market and is embarking on an ambitious plan to expand rapidly abroad. Some 90 per cent of the Indian population lives within 100 kilometres of an Indigo-served airport.

Mr Elbers is already three years into his race to take IndiGo to new heights after the Dutchman took the reins at the airline in September 2022, following three decades at the helm of KLM.

Indigo is India's biggest airline by fleet size and market share, no mean feat in the world's third-largest aviation market, after the US and China. India is one of the world's fastest-growing travel markets and the world's most populous country.

About 174 million passengers travelled from and within India by air in 2024, accounting for around 4.2 per cent of the global total, according to the International Air Transport Association.

The airline, which marked its 19-year anniversary in August, is one of Airbus' biggest customers. With a fleet of 416 aircraft, IndiGo operates about 2200 daily flights and carried 118 million passengers in 2024.

Placing record aircraft orders at the Paris Airshow in 2023 and taking deliveries at the rate of one jet per week, IndiGo has more than 900 planes on order, including Airbus A321 XLRs and A350s.

Middle East conflicts

IndiGo, which connects 94 domestic and 44 international destinations, is solidifying its domestic presence while quickly expanding overseas.

"Abu Dhabi is a great example," Mr Elbers said, pointing to Indigo's operations from five Indian cities to the UAE capital with 35 flights per week in 2023, now up to 16 Indian cities connected to the emirate with 111 flights a week.

In the UAE, IndiGo serves Dubai, Abu Dhabi, Ras Al Khaimah, Sharjah and Fujairah.

Dubai is a "maturing market", with a stable number of flights, but has been upgraded with the addition of business seats on flights from Delhi and Mumbai, Mr Elbers said. The premium product, dubbed IndiGoStretch, is also available on flights to Singapore, Phuket and Bangkok.

The Abu Dhabi market is growing, particularly with the opening of the new terminal at Zayed International Airport, where IndiGo is solidifying its capacity increase and working with tourism authorities to develop the destination, Mr Elbers said.

"What IndiGo is offering to the travelling public in Abu Dhabi is perhaps unprecedented access to India with 60 non-stop destinations... Increasingly we are offering connectivity beyond India," he said, pointing to Krabi and Phuket as examples.

Elsewhere in the Gulf, IndiGo operates flights to Bahrain, Dammam, Doha, Kuwait, Muscat, Madinah, Jeddah and Riyadh.

The continuing geopolitical conflicts in the Middle East, most recently with Israel's attack on Doha, has caused travel disruptions and had a minimal short-term impact on the airline but has not deterred its long-term plans to operate in the region.

"Of course it had some effect, but overall the way we see traffic between India and the UAE is pretty consistent and will continue to grow," he said.

"All these places will continue to build, to grow and to need people to work – blue-collar and white-collar [workers]– so that mix will continue to be there."

While IndiGo has been approached "every now and then" to set up a hub in some Middle East cities, the Indian airline is focused on the massive growth opportunity in its home market, Mr Elbers said.

Global push

"In the last quarter, we've been very much focused on our long-haul expansion," Mr Elbers said.

The airline started flights to Manchester and Amsterdam in July, and will add London Heathrow, Copenhagen, Athens and Siem Reap in Cambodia to its route network.

The airline is growing in South-east Asia and in Central Asia with the addition of flights from Mumbai to Almaty and Tiblisi.

"We keep solidifying that international presence and we're quite proud that recently we became the Indian operator with the largest number of international destinations," Mr Elbers said.

It doubled its A350 plane order to 60 of the wide-bodies in June, with deliveries to start in 2027. In the meantime, it signed a damp-lease agreement for Boeing 787 Dreamliner planes.

In June, it also signed a code-sharing pact with Delta Air Lines, Air France-KLM and Virgin Atlantic Airways.

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A321 XLR unlocks new markets

The delivery of Indigo's first Airbus A321 XLR by the end of 2025 will enable the airline to fly deeper into Europe and parts of Asia that it cannot currently reach. Athens will be the inaugural destination to be served by the longer-range narrow-body jet with six weekly direct flights by early January 2026, making IndiGo the only Indian carrier to offer direct flights between India and Greece.

It plans to connect Athens to Delhi and Mumbai, with operations of three frequencies per week on both routes.

"The XLR will help us open new destinations which cannot be served today and Athens is a great example for that," Mr Elbers said.

The aircraft will also help the airline to reach existing destinations from more geographically distant hubs in India, he added.

Asked about other destinations it will deploy the A321 XLR, he said other points in Eastern Europe, Italy and Asia are all possibilities.

India-China flights

IndiGo, which currently flies to Hong Kong, is awaiting signals from the government to re-open flights to mainland China that have been suspended since the Covid-19 pandemic, Mr Elbers said. IndiGo previously flew to Chengdu and Ghuanzou.

"Whenever the two governments were to decide that it's the right tome to start, IndiGo is ready to resume operations...There has been some meetings a couple of weeks back where positive indications were given that this might happen.

"The opportunity in the longer-run between the two nations in terms of air travel is phenomenal."

The travel market potential between the world's second-largest economy and the fourth-largest economy with a combined population of 2.9 billion people is massive, he added.

The A321 XLR would "absolutely" be well-suited to operate flights between the two countries, he said.

Air India crash

Indigo has recorded a bigger-than-expected drop in quarterly profit due to "external causes" that hit demand including the India-Pakistan border conflict and the Air India Boeing 787 plane crash in June that dented the broader travel sentiment and weighed on airlines.

While Indigo has recorded "some immediate effects" on its first quarter earnings, "we don't see any structural change" in the long term, Mr Elbers said.

Net income in the three months ended June fell 20 per cent to 21.8 billion rupees ($249 million), InterGlobe Aviation, the operator of IndiGo, said in July. Revenue rose 4.7 per cent to 204.96 billion rupees, while total costs increased 10 per cent.

India remains an "underserved" travel market and the economy is projected to grow between six to seven per cent each year, "so we are very confident that the Indian market will continue to grow," Mr Elbers said.

"We're building a global airline, not for the next quarter or for quarterly results, but we're building it for the long term and for sure we'll see some quarters up or down."

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