Indigo Airline: How did it become a Monopoly in the Aviation Industry?

Whenever there is a debate about a capacity cap, a floor price, a ceiling price on fares, or other aviation-related issues, the finger is always placed at IndiGo. The Indigo airline can dominate the market like never before, with a war chest of over Rs 15,000 crore and an almost constant stream of new planes on the way.

Competitors are naturally irritated by India’s largest airline’s size. IndiGo has created a formidable bank of flights from metros and developed cities over the years by a combination of nibbling at other airlines’ routes and driving traffic with lower pricing.

If you’re a frequent traveler, you’ve almost certainly flown IndiGo Airlines and can attest to its affordable fares and excellent service. However, you may be ignorant of the country’s largest airline service’s nearly 17-year legacy and the path it has taken to maintain that legacy.

History of Indigo Airline

IndiGo Airlines, based in Gurugram, Haryana, was founded in 2005 and has been in business since 2006. It has always had an advantage over other airlines due to its innovative thinking. Who else would put such a large aircraft order before even starting service?

When full-service carriers like Indian Airlines, which is now part of Air India, Kingfisher, and Jet Airways dominated the market in 2005, IndiGo took a risk and ordered 100 A320-200s. This was the airline’s first daring move, costing nearly $6 billion and representing a significant expenditure for a startup. IndiGo, on the other hand, needed jets quickly and wanted to expand its fleet quickly, and it got both.

Monopoly in the Business

IndiGo Airlines was quickly gaining popularity in India thanks to its inexpensive fares and well-planned advertising campaign. IndiGo overtook Air India as India’s third-largest airline in December 2010, trailing only Kingfisher Airlines and Jet Airways. A year later, the expanding carriers made an even larger order for 180 aircraft, comprised of 150 A320neos and 30 more A320ceos.

IndiGo began international flights in 2012, in addition to adding more local destinations, as its fleet grew. IndiGo overtook Jet Airways as India’s largest airline in August of the same year.

IndiGo was able to achieve success due to its profitability in a country where airlines struggle to be successful and cease operations, such as the short-lived Air Mantra and Air Pegasus. The carrier became profitable in 2009 and has remained profitable since then.

Its decision to be a low-cost airline that only serves economy class means it doesn’t have to pander to VIPs or operate expensive airport lounges, which keeps its profits afloat. They also lack an in-flight entertainment system and complimentary meals, opting instead for a buy-on-board meal service that helps keep costs down.

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