Last-Minute Travel Rush Fuels IndiGo’s Expansion Plans

India’s domestic air travel market remains heavily skewed toward last-minute bookings, with a significant share of tickets being purchased within the same month of travel, IndiGo CEO Pieter Elbers said. The trend poses both challenges and opportunities as the airline expands its offerings, including business class services on select routes.

“The incredible late-booking character of the Indian market means a very significant part of bookings happen in the month itself,” Elbers said. While this adds uncertainty, he noted that recent months have shown strong demand, with passenger traffic growing over 11% year-on-year in January and February, according to Directorate General of Civil Aviation data.

IndiGo, which turned 18 last fiscal, has been expanding its portfolio to cater to customer preferences. The airline introduced its business class product, Stretch, on the country’s busiest business routes. Launched in August, it became operational on the Delhi-Mumbai route in November, followed by Delhi-Bangalore and, most recently, Delhi-Chennai. “So far, so good,” Elbers said about the rollout.

Although IndiGo is the world’s largest acquirer of new aircraft, receiving one plane every week, he noted that it takes time before all flights on a particular route can offer business class services. The airline has reached full-scale operations for Stretch on the Delhi-Mumbai and Bangalore routes, while Delhi-Chennai services started just days ago.

IndiGo plans to sustain its growth momentum into fiscal 2026, focusing on increasing aircraft capacity, expanding international operations, and strengthening its loyalty programme, BluChip. “We will continue doubling and internationalising while promoting our customer loyalty programme,” Elbers said.

Despite India’s competitive fare landscape, IndiGo remains committed to affordability while selectively offering premium services on routes with sufficient demand. “We are not offering business class for routes to Krabi, but we are offering the same in Bangkok,” he said, adding that the Bangkok business class service has been performing well.

As the airline continues to execute its strategy, the focus remains on balancing affordability, expansion, and premium offerings in a market defined by last-minute travel decisions.

IndiGo expects to show good results, projecting 118 million customers for fiscal 2025, up from 113 million in fiscal 2024. Elbers reaffirmed the airline’s long-term strategy of doubling its size by the end of the decade. International expansion remains a key focus, with IndiGo now serving 40 overseas destinations, compared to 20 just a few years ago.

While the airline has not disclosed specific occupancy levels for its business class, Elbers said they are working with partners to build market awareness and customer attachment to the product. “It will be premature to analyse occupancy levels in business class at this stage,” he said.

On the financial front, IndiGo has engaged in some forex hedging, though Elbers emphasised that hedging should be viewed with a long-term perspective rather than quarter-on-quarter fluctuations. The airline is also benefiting from higher international sales, which provide a natural hedge against currency volatility.