IndiGo recalibrates Stretch deployment, strong balance sheet allows experimentation

Last August, when IndiGo”>IndiGo turned 18, the airline launched a business class product named IndiGo Stretch. The airline had announced that it would induct 45 aircraft by the end of 2025 and offer IndiGo Stretch on 12 metro routes within India, starting with Mumbai- Delhi, the busiest route in the country, from November 2024. The airline, since then, has started these flights on Delhi-Mumbai, Delhi-Bengaluru, Delhi-Hyderabad, Delhi-Chennai and Mumbai-Bengaluru routes.

Also Read: Analysis: How IndiGo reported a healthy profit in a challenging quarter

The airline has since recalibrated its plans to offer the product on routes to Singapore, Bangkok and Dubai, prioritising these markets over the remainder of the domestic market. The airline already offers connections from Bangkok to its Amsterdam and Manchester flights, and over a period of time, would look at tweaking schedules to other points in South East Asia to offer seamless two-way connectivity. And the Stretch product will be an additional offering in the market.

The airline, however, has not abandoned its plans to deploy the product in the remainder of cities in the Indian market but only recalibrated the timelines to focus more on the opportunity which the international network currently provides. This comes amid the airline taking fewer aircraft this year thus far, as compared to 2024 when it took deliveries of 58 aircraft, the highest ever, becoming the top carrier for Airbus last year. Comparatively, this year, the airline has taken deliveries of only 16 planes in the first six months of the year.

Confused product

The airline deployed the 787-9 Dreamliner to Bangkok from Delhi, with the Premium Economy in these Norse Atlantic aircraft marketed as Stretch. The same is now deployed to Amsterdam and Manchester. The product is remarkably different from what it offers on its own narrowbody network. Not only that, but the flights to Amsterdam and Manchester also offer hot meals and the passengers getting access to the lounge and alcohol included in the ticket, unlike those to Bangkok, Singapore and Dubai, where its own A321 in dual class operate or are scheduled to operate.

IndiGo will have a long way to go to adjust the product and market mix and will possibly stabilise after 2027 when its own A350s enter service with a business-class product, which is currently under development.

Strong balance sheet allows experimentation

As of today, less than half a per cent of total seats on offer by IndiGo comprise the IndiGo Stretch. Even if it takes longer for the market to accept the product, the impact on the airline is minimal on both load factors and finances. IndiGo has a very strong balance sheet and that gives the airline a very long rope to try out new things, offering a longer period to try out its new offerings, unlike competition. As the product stabilises and the codeshare routes increase, there will be more routes in the market which will see demand for a business class product, but the markets may not support 12 business class seats. Will the airline then look at a smaller business class cabin? The operational challenges of maintaining a sub-fleet are high, but in its own words, IndiGo has left the pure LCC (low-cost carrier) station long back.

As the airline completes deployment of Stretch to Singapore, Bangkok and Dubai from Delhi and Mumbai, it may have to add to the 45 planes it plans to have Stretch if it has to add more international routes with Stretch and start adding domestic routes again. It has periodically announced sales for its Stretch product, a ploy to let passengers experience the product. If IndiGo’s journey is seen over the last five years, the only thing constant is change.