IndiGo is pressing ahead with a new Stretch strategy

In July last year, IndiGo, India's largest airline by fleet and market share, announced that it would induct 45 planes with dual-class seating by the end of 2025 and introduce IndiGoStretch, its business class equivalent product, on 12 routes in the country. As of May, the airline has started services to Mumbai, Bengaluru, Chennai and Hyderabad from Delhi and between Mumbai and Bengaluru, covering five out of 12 routes. The airline has not disclosed the 12 routes it intends to deploy the product on, but all indicators point to routes connecting the six metros, except the short-haul southern triangle of Bengaluru, Hyderabad and Chennai being connected to each other.
However, the airline seems to have second thoughts now on the deployment plan. The airline took delivery of its 23rd such aircraft with 12 IndiGoStretch seats and 208 economy class seats over the weekend, marking 50 per cent of its intended target within six months of the first aircraft becoming operational. The induction rate comes at a time when most airlines are struggling amidst the supply chain constraints and rival Air India has been forced to delay its refurbishment, not once but multiple times, where it now won't be starting the programme of B777 refurbishment when it had initially announced that it would finish it by 2025. While IndiGo always had planes on order, the changes to the configuration requiring different seats have been managed despite the supply chain challenges, which have not just impacted aircraft deliveries but also seats.
IndiGo is recalibrating the deployment with IndiGoStretch now available on Delhi-Bangkok flights on its own metal. The route saw deployment of the Norse Atlantic damp-leased 787 Dreamliner aircraft, which came with 56 Premium Economy seats, being sold as Stretch by IndiGo. The deployment to Bangkok will end towards the end of this month and will be replaced by IndiGo's A321 in dual-class configuration. The airline will also add IndiGoStretch on routes to Phuket as well as Dubai. This is a change from the initial announcement and takes precedence over flights on domestic routes which are not yet fully connected, with flights to Kolkata yet to see Stretch and routes like Mumbai-Chennai and Mumbai-Hyderabad yet to see Stretch operations. ..
The change in plans would most likely be a reason for more demand on international sectors, tested by deploying the Dreamliner to Bangkok and a lack of consistent demand on domestic routes. The airline has maintained that passengers have received the product very well, and class-specific data on loads is never available in the public domain. However, its frequent deep discounting on Stretch and going slow on other metro routes is an indicator that it is recalibrating the deployment and looking for routes where the returns could be faster than on domestic.
Later this year, both Mumbai and Delhi will get another airport. With the closure of T1 at the Mumbai airport, IndiGo may be forced to move some flights to Navi Mumbai. It will be a tough call to decide the split as more airport pairs start, which could include Mumbai-Noida, Navi Mumbai-Delhi and Noida-Navi Mumbai. Assuming its incremental capacity in most cases, will IndiGo look at more aeroplanes with dual-class configuration or will more of the metro-to-metro routes be left out? The answer could lie in the current performance of IndIGoStretch, the business-class product.
IndiGo has codeshare partnerships with a lot of players now, which include the likes of American Airlines, JAL, Air France-KLM, Qantas, among others. These are premium carriers and offer Business and, in some cases, Premium Economy class as well. Over the years, the connecting passengers on IndiGo are flying the domestic leg in economy class; a handful of routes where significant connecting codeshare traffic from the front cabin is identified could become potential candidates to add IndiGoStretch.
The airline has repeatedly said that it is doing well with the IndiGoStretch cabin, but like its rival Air India, the exact loads remain a mystery. Any new class of service requires time to stabilise. However, IndiGo's front cabin does not offer frills like lounge access or hot meals (except for routes to Amsterdam and Manchester). In fact, there remains only one choice of meal, unlike traditional business class offerings.
The airline that revolutionised air travel in India by trying to make it a commodity before having the pricing power may well be trying to do the same with the Business class offering, to make it more affordable and appealing to aspirational travellers, which then becomes a segment in itself.
IndiGo has had a razor-sharp focus on its competition since its inception. As it outpaces every other airline in the country and competes with the Air India group, it will have to reinvent itself. The older days of adding capacity to ensure that competition drains its resources may not work well with the Air India group as it digs in for the long haul, despite the cash burn.
The induction of half its planned dual-class fleet in six months shows that it still has the edge in execution, which possibly no other airline in India has. Does it have the capability to make a new product work? The market will test its resolve.

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