IndiGo is bracing for two fierce new competitors in the market, but will it lose out?
Indian aviation is adding some fresh players. The recently privatized Air India and low-cost Akasa Air are both hoping to shake up the market, putting the existing players under pressure. So how will India’s largest airline, IndiGo, handle the recent challenges?
India is a price-sensitive market dominated by budget carriers. IndiGo has hung this wave of roaring traffic and cemented itself as the lid by a long shot. However, the carrier also profited from the absence of a big full-service carrier or funding alternatives.
Tata Air India has already forced some changes out of
Now, the airline could be facing a challenge from both of those. Tata Air India has already forced some changes out of the budget giant in a request to stay competitive. With benefit standards set to turn around at the flag carrier, IndiGo is planning to offer more passenger comforts to stop too numerous passengers from pulling out.
The changes at Air India may also adversely impact IndiGo‘s wide-ranging international development. If passengers actively seek out the former, which is likely on global flights, the low-cost airline could see its demand share damaged.
- However, IndiGo will almost certainly retain the lower cost point for years to reach, ensuring that it is not in dire straits by a resurgent Air India.
When it comes to Akasa Air, the airline has a longer path to evolving a major challenger. With three major low-cost airlines in India, Akasa will need time to establish itself, add routes and aircraft to the network. This means it will be a while before it manages to take over a significant chunk of the market.
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IndiGo will be eying Akasa during its early
However, IndiGo will be eying Akasa during its early years. The airline has poached several of its employees to head up operations and placed a substantial order for 72 737 MAXs. With the first delivery less than two months away, Akasa will make the Indian market even more competitive.
As of January, IndiGo had a market share of 55.5%, far more significant than its share at the beginning of the pandemic. As two new entrants join the market, we can expect to see the leader’s share decrease slightly. However, a significant shift will only be possible once Akasa has a large fleet and Tata merges all of its subsidiary airlines.
For its part, IndiGo has been actively reacting to the differences in the market. The carrier is planning on upgrading its A321neos to be more competitive with Air India by adding more comfortable seats and hot meal benefits.
There are even discussions of dropping included limited baggage to bring down the price of tickets. As the market heats up, passenger pick is just set to more significant and more useful.
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