IndiGO expands overseas connectivity while Air India looks inward and strengthens domestic hold
Indian airlines are widening their global reach, with Air India and IndiGo at the forefront. IndiGo’s expansion in foreign markets is fuelled by new planes and growing route networks. On the other hand, Air India is focusing on consolidating its domestic business before expanding globally as part of its long-term growth strategy.
Let’s explore how and why these two Indian airlines are soaring globally, with details on their current market share and future plans.
IndiGo: The Airbus A321XLR Factor
IndiGo is aggressively pushing to strengthen its presence in overseas markets. Among the major aspects of its strategy is the introduction of the Airbus A321XLR, which will arrive in June 2025. This new plane will allow nonstop travel to major hubs like London, Amsterdam, Paris, Tokyo, and Perth. Thus, dramatically expanding IndiGo’s long-haul capabilities.
Apart from the A321XLR, IndiGo is leasing Boeing 787-9 aircraft on lease from Norse Atlantic Airways for its European business. The airline is set to become a dominant international player through increased long-haul connectivity by this move.
The carrier also plans to have 40 international destinations by 2024-25. New routes, like the daily Delhi-Bishkek service in Kyrgyzstan, are being introduced to enhance connectivity between various regions.
Air India’s Strategic Growth
While IndiGo is focusing on international expansion, Air India is undergoing a massive change under the Tata Group’s leadership. The airline is expected to receive around 60 new aircraft in 2025, which will enhance its fleet. As a result of this, its connectivity will grow to key global destinations in South-East Asia, Europe, and the Americas.
To enhance global connectivity, Air India is offering multiple repeating flights on key routes, including Ahmedabad-London Gatwick, while adding new routes like Delhi-Zurich. These additions are designed to enhance passenger experience while increasing the airline’s footprint.
Air India has also projected an ambitious goal of flying 20 million international passengers in 2025, a high growth rate from the last year. This objective reflects the aviation company’s intent to capture more of the international airline market.
Indian Airlines Global Expansion: A Collective Goal
Indian airlines, such as IndiGo and Air India, are all trying to achieve a combined market share of over 50% in the international sector by 2025. This challenging goal reflects the rising confidence and competitiveness of Indian carriers in the international airline market. The expansion plans of these carriers are complementary to India’s overall economic development, infrastructure development, and rising demand for foreign travel.
India’s geographical position between Europe, the Middle East, and the Asia-Pacific region provides its airlines with a distinct edge. Its central location enables Indian carriers to leverage transit traffic and position themselves as important connecting points. Airlines are also heavily investing in fleet growth and upgrades to fuel their expansion strategies. Air India has ordered more than 470 new planes, whereas IndiGo is boosting its fleet with long-range aircraft to make it more efficient and comfortable for passengers.
Challenges Confronting Indian Airlines in Expansion Abroad
Despite the robust growth trend, Indian airlines are facing many challenges while expanding abroad:
1. Depreciation of the Indian Rupee has raised operational expenses. This is because most of the costs related to aircraft leases, maintenance, and fuel are in foreign currencies. It has stretched profitability, leaving airlines unable to sustain competitive prices while absorbing rising costs. However, airlines such as Air India can reduce some of these difficulties by collecting international fares in foreign exchange, which counteracts the effects of currency devaluation.
2. Operational issues like crew shortages, aircraft grounding, and supply chain disruptions have also impacted expansion plans. Skilled pilot, maintenance engineer, and cabin crew shortages have led to longer turnaround times and operating costs. Losses due to increasing fuel prices and maintenance costs have weakened the financial health of airlines. Thus, making long-term growth unsustainable.
3. Infrastructural issues continue to be a problem, especially for rural connectivity. Despite efforts such as UDAN, most tier-2 and tier-3 cities don’t have air connectivity. Lack of well-established Maintenance, Repair, and Overhaul (MRO) facilities also make Indian airlines dependent on international services. This adds costs and lowers efficiency.
4. Regulatory challenges such as high fuel taxes and old aviation policies have further made things difficult. India levies high taxes on Aviation Turbine Fuel (ATF), which raises the operating costs of airlines. Laws like the Aircraft Act, 1934, and Aircraft Rules, 1937, have failed to be updated with advances in aviation technology, causing inefficiencies in the regulatory process.
5. Environmental issues are another difficulty, as Indian carriers are being pressured into adopting environmentally friendly practices under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Complying with such sustainability needs raises airlines’ costs of operation as they need to invest extra in green aviation technologies.
How Indian Airlines Are Overcoming Global Expansion Challenges?
IndiGo and Air India are pursuing different strategies for their expansion plans. IndiGo is going full throttle on international routes, introducing new destinations and leasing widebody aircraft to compete in the international airlines market. IndiGo has also added seven new foreign routes and is looking to expand further. Thus, leveraging bilateral agreements and partnerships to enhance its position.
Air India, however, is strengthening its domestic network and selectively expanding its presence abroad. Post-merger with Air India Express, the airline has shifted domestic routes, introduced new indian destinations, and worked on growing market share domestically before going international in a big way. Tata Group’s takeover of Air India, Vistara, and Air India Express is a strategic move to battle IndiGo in the domestic market while gearing up for long-haul expansion.
Conclusion
IndiGo and Air India are taking Indian airlines industry global with strategic growth and modernization initiatives. As these Indian carriers ride out challenges like currency devaluation, high operating expenses, and regulatory issues, their dedication to fleet renewal and global partnerships will be important to maintain growth. These initiatives, however, will make Indian aviation a key player in global air travel, providing greater connectivity and competitive choices around the world.
