last year, Largest commercial aircraft order in world history—500 narrow-body Airbus A320 family aircraft — IndiGo recently put the aviation world back in the spotlight with its recent order for 30 wide-body Airbus A350-900 aircraft, with deliveries scheduled to begin in 2027. Additionally, IndiGo also has purchasing options. An additional 70 aircraft from the A350 family will be eligible.
India’s largest airline, which is also one of the world’s largest low-cost carriers by passenger numbers, has made its intentions clear with the latest order. The company, which has ruled the Indian skies, has big dreams of making its mark on the world with direct long-haul flights from Indian airports. However, there’s one problem.
While the low-cost, short-haul model, of which IndiGo is the clear champion, has been mastered by many airlines around the world, the same cannot be said for the long-haul, low-cost airline model. Many have tried, burned their fingers, and even closed shop, but some continue to struggle. Numerous failures and few relatively consistently profitable long-haul low-cost carriers underscore the sector’s reputation as the Ultima Thule of civil aviation.
Wow Air, Norwegian Air, Thomas Cook, Air June, XL Airlines, and many other airlines have failed with the long-haul, low-cost airline model. Other companies in the sector, such as AirAsia X, are also struggling. While there are some profitable long-haul, low-cost airlines such as Scoot, Jetstar, Cebu Pacific, Tui and French Bee, there are still plenty of pitfalls and unknowns, and more crashes than happy landings. There are many segments.
Why is this segment a largely unconquered frontier? And what can IndiGo do to plant its flag and build a successful long-haul product and network? There are no simple answers. There are just a lot of factors, data points, business philosophies and product philosophies. Airlines have been trying for years to develop recipes for successful long-haul, low-cost models using these ingredients, but most have failed the taste test. Now, IndiGo is working on perfecting its secret sauce, if it exists.
High cost dilemma for low-cost airlines
The basic business principles of low-cost carriers (LCCs) are fairly simple, at least in theory. The idea is to minimize costs in order to offer low fares and fill aircraft while still making a profit. Meanwhile, rising costs will limit LCCs’ pricing power, thereby narrowing the gap with full-service carriers (FSCs).
One of the main factors that makes low-cost long-haul operations difficult to operate and maintain is the high cost of fuel compared to short-haul hops. This means that airlines operating long-haul routes with large aircraft find it relatively difficult to control costs, as fuel costs, determined by international oil prices, tend to account for a disproportionately high proportion of their cost structure. means.
Modern wide-body aircraft like the A350 are more fuel efficient than previous generations of aircraft, but the jury is still out on whether they can truly support long-distance air travel at low cost. While operating narrow-body aircraft is a feature of the world’s leading LCCs, wide-body aircraft themselves are much more expensive. And even more so with the new generation of widebody aircraft.
In addition, operating wide-body aircraft costs more because they require additional personnel, such as cockpit and flight attendants, due to the very long distances they fly and the need for rest and fatigue management. Low-cost airlines thrive on fast turnaround times and high capacity utilization, but achieving these sustainably on long-haul operations can be difficult. Additionally, maintenance and repair costs for widebody aircraft tend to be higher and have longer schedules.
networking skills
Apart from cost efficiency, network planning is a major factor in the difference between success and failure in commercial aviation. While it is often the airline’s products and pricing that get the most attention, an airline’s network strategy and development are fundamental to how the airline performs operationally and financially. It becomes. For low-cost, long-haul airlines, the importance of network design is even more emphasized.
Airline network design is shaped by a variety of factors, including demand and competition, so there is no one winning formula. Additionally, while every airline’s network has some unique features and peculiarities, airline industry experts believe that some relatively successful long-haul, low-cost carriers have several unique network designs. He points out that there are some common elements.
As is the case with successful short-haul LCCs, these factors include, rather than entering competitive, high-frequency routes, there are few or no competing airlines and overall lower frequency, more This broadly includes operating many routes. Even in long-haul segments, operating from multiple hubs or points rather than one major hub can be a better network design for LCC operations.
In other words, the global experience of successful LCCs is that LCCs focus on point-to-point networks and on meeting latent demand and stimulating demand on less congested routes. indicates that they tend to perform better financially. And they often try to fly to and from secondary airports, which are cheaper to operate than larger airports.
Of course, there are exceptions due to factors such as source market demand levels, fleet strength, the geographic spread of an airline’s home country, airport infrastructure, and national and regional aviation markets and regulations.
Linvolves some extra costs
Positioning of low-priced products is also important. For short-haul flights, a bare-bones product without many comforts or amenities may work just fine. However, when it comes to long flights, travelers may be reluctant to choose such products. And equipping aircraft with more amenities, such as charging sockets, more comfortable seats, in-flight entertainment (IFE) and ovens to enable hot meal service, will certainly increase costs.
Different airlines are applying different solutions and innovations, some of which do not match traditional low-cost airline products at all. Many in the industry now refer to these products, which combine LCC and FSC features, as hybrid products.
Some airlines have introduced dual-class cabins, offering seats and services like business class or premium economy at a higher price. Some airlines offer economy class passengers amenities such as in-flight entertainment, power outlets, and hot meals as part of standard service or on demand for an additional fee.
Some of these airlines offer all-inclusive fare options in addition to the LCC’s standard individual fares, where passengers pay extra for everything from seat selection to baggage allowance to on-board food and beverages. There are some places where there are.
Indigo’s long-distance flight path
IndiGo has so far not commented on the routes on which the A350 may be introduced, the cabin configuration or the amenities that may be offered on its wide-body products. In a recent investor call, Indigo CEO Peter Elbers said all options were open and a decision would be made in due course based on India’s flyer and the evolving requirements of the country’s aviation landscape. Stated.
With A350 deliveries scheduled to begin in 2027, IndiGo still has time to finalize its network strategy and design, as well as the long-haul products it wants to offer. The airline has not provided details on either case, but there are signs pointing to a general direction.
On the product front, there are indications that IndiGo may adopt a dual-class cabin configuration, something other successful long-haul LCCs have done as well. Seats like premium economy class and business class have several services built-in and are sold at a significantly higher price than regular economy class seats, allowing airlines to earn additional revenue. can help fill the remaining seats in the cabin by offering lower fares. . IndiGo currently offers all-economy cabins on almost all its flights.
Regarding IFE, the company has already conducted BYOD (Bring You Own Device)-based trials on the Delhi-Goa route. It will be interesting to see whether the A350 will move away from seatback screens like Paris-based long-haul LCC French Bee. Will there be charging points onboard? And will IndiGo finally start offering hot meals? These are among the questions the airline will answer closer to the introduction of his A350.
Regarding IndiGo’s network design plans, Elbers said IndiGo is looking to offer direct international flights from multiple points within India, as well as major airports in Delhi and Mumbai. This plan appears to be consistent with the multi-hub network design of most successful long-haul LCCs. Given the growing demand for international travel and IndiGo’s strong domestic and short-haul international network, this model offers long-haul operations with great potential for domestic-to-international and even international-to-international connections. It could serve airlines well.
Over the past few years, IndiGo has been pushing to expand its international network wherever possible with its narrow-body fleet. However, rather than entering competitive or congested routes, the company is focusing on identifying underserved routes or routes with latent demand and stimulating demand on other specific routes. is placed. This, too, is a strategy that has worked well for many LCCs’ long-haul operations, and there are clear signs that IndiGo may stick to this strategy in its long-haul network design.