MUMBAI//Even before it was launched in India's crowded aviation market in 2006, IndiGo airline turned heads with a deal with Airbus to buy 100 A320 aircraft.
Never before had a start-up airline, especially a budget carrier, managed to gather resources on this scale for such a hefty deal. Yesterday's announcement that it would buy 180 more A320s may have elicited similar reactions worldwide, but the deal does not come as a surprise to aviation industry experts who have tracked IndiGo's robust financial performance since its launch.
IndiGo has impressed observers with a cost structure and profit margin that few of India's other dozen airlines have achieved amid highly taxed infrastructure, rising fuel costs and stiff competition.
For the financial year 2009-2010, the airline posted a pre-tax profit of 5.5 billion rupees (Dh447.57 million) on a turnover of 26.64bn rupees, according to India's director general of civil aviation. Its main competitors, Jet Airways and Kingfisher Airlines, both full-service carriers, together lost 21.14bn rupees in the same period.
IndiGo, owned by InterGlobe Enterprises and the entrepreneur Rakesh Gangwal, in November captured 18 per cent of the market share, outpacing the national carrier, Air India, to become the country's third largest airline.
"Indigo has outperformed all other budget airlines," said Harsh Vardhan, the chairman of Starair Consulting. "And it is now competing head on with full-service carriers."
Its growing popularity with Indian passengers, analysts say, has little to do with the airline's stylish air hostesses. The airline says it has an aircraft utilisation time of 11.5 hours per plane every day for its fleet of 32 aircraft, significantly higher than the industry average. The turnaround for each aircraft averages about 30 minutes, much swifter than other carriers.
"IndiGo has bucked the trend by focusing on the basics," Mr Vardhan said.
