Betting big on low-cost flyers: Pieter Elbers

Speaking at the Skift India Forum, Pieter Elbers, CEO IndiGo stated that IndiGo, has had a three-pronged strategy: On-time performance, affordable fares, and a courteous and hassle-free service.

“India is a cost-competitive, price-sensitive, and consumer value-conscious market. Maintaining cost leadership is important for us. Every step we take is keeping that in mind, because if we don’t, we would be out of business.” He said that since the beginning of IndiGo, it had three focal points: On-time performance, affordable fares, and a courteous and hassle-free service. “But India is changing. We need to embrace the changes taking place and enrich the portfolio building on the foundation we have, and we are doing that with our new product.” IndiGo vs. Other Low-Cost Carriers Elbers distinguished IndiGo from the traditional low-cost carriers in Europe.

 “They operate in secondary airports, have relatively low frequency, do not carry cargo, and have no loyalty program. IndiGo flies to all major airports in India and is a market leader in all, flies 20 times a day each side between Delhi and Mumbai alone, has good cargo operations, and a loyalty program.” For him, the focus is on ensuring that customer needs of India are well catered to by the product that IndiGo offers. That includes catering to first-time flyers and the emerging aspirational class of travellers as well, Elbers emphasized.

IndiGo announced its foray into long-haul destinations this month, with Amsterdam and Manchester being the first destinations from July this year. “International air travel in India was catered to by non-Indian airlines for a long time.

The further away you go from India, the lower is the market share of Indian carriers. There is an opportunity for us to offer a product that is operated by an Indian operator and address that market.” He still intends to keep IndiGo’s direct flights cost competitive. However, there will still be some time before IndiGo enters ultra long-haul operations. “There is a lot of long-haul flying to do before we go the ultra-long-haul route.”

 India currently has 800 to 900 planes in operation across airlines. In China, this figure is 3,500 to 4,000 for the same population. “That number just shows that the growth will continue. The Indian economy is on a trajectory of growth. What is currently happening in India happened in China 15-20 years ago.” Maintaining Cost Leadership despite its venture into business class and loyalty programs, indigo wants to compete by budget price points too.