Interglobe Aviation , operating as IndiGo, India's leading airline, has unveiled an ambitious strategy to significantly boost its international presence and enhance its maintenance capabilities. The carrier aims to increase its international capacity share from the current 28% to 40% by 2030, marking a substantial shift in its operational focus.

Fleet Expansion to Support Long-Haul Operations

To facilitate this international growth, IndiGo is set to introduce new aircraft types to its fleet:

• A321 XLR aircraft will be added in the current fiscal year
• A350-900s are scheduled to join the fleet in 2027

These additions will enable IndiGo to operate longer routes and expand its international network more effectively.

Recent International Route Launches

IndiGo has already taken steps towards its international expansion goal:

• Launched flights to Manchester and Amsterdam
• Utilizing leased Boeing 787 Dreamliners from Norse Atlantic for these routes

This move demonstrates IndiGo's commitment to entering new markets and its willingness to explore different aircraft types to suit its expanding network needs.

Domestic Dominance and Current Operations

While focusing on international growth, IndiGo maintains a strong position in the domestic market:

• 64.50% domestic market share
• Operates 2,200 daily flights
• Fleet of over 430 aircraft

These figures underscore IndiGo's significant presence and operational scale within India.

MRO Expansion Plans

In addition to its network growth, IndiGo is also investing in its maintenance capabilities:

• Exploring new MRO (Maintenance, Repair, and Overhaul) opportunities
• Establishing a new MRO facility in Bengaluru

This move towards in-house maintenance capabilities could help IndiGo manage costs and improve operational efficiency as it grows.

Outlook Amid Challenges

Despite facing industry-wide challenges such as aircraft groundings and fuel cost volatility, IndiGo maintains a positive outlook. The airline's optimism is supported by:

• Healthy passenger demand
• Planned capacity growth
• Strategic fleet and network expansion initiatives

As IndiGo embarks on this ambitious expansion plan, it aims to strengthen its position not only as a domestic powerhouse but also as a significant player in the international aviation market. The coming years will be crucial as the airline navigates the complexities of long-haul operations and increased international competition while maintaining its strong domestic presence.

Interglobe Aviation Limited (IndiGo), India's leading airline, has received a significant boost to its credit profile as ICRA Limited upgraded its long-term credit rating to [ICRA]AA with a Stable outlook. This upgrade from the previous [ICRA]AA- rating reflects the airline's strong operational and financial performance in a recovering aviation sector.

Credit Rating Upgrade

ICRA has upgraded IndiGo's long-term credit rating for bank facilities totaling Rs 9,000.00 crore. The rating agency reaffirmed the short-term rating at [ICRA]A1+, which is the highest rating in this category. This upgrade is a testament to IndiGo's robust financial health and market leadership.

Strong Financial Performance

The credit rating agency cited several factors contributing to this upgrade:

• Healthy passenger traffic growth of 11% year-on-year
• Capacity expansion of 13% in terms of available seat kilometers (ASKM)
• Revenue surge of 17% to Rs 80,803.00 crore
• Comfortable liquidity position of Rs 33,153.00 crore

Market Leadership

IndiGo has significantly strengthened its position in the domestic aviation market:

• Domestic market share increased to 63%, up from 48%
• Operating 434 aircraft, connecting 91 domestic and 40 international destinations
• Average load factor of 86%

Fleet Expansion and Future Outlook

The airline continues to expand its fleet and network:

• Current fleet of 434 aircraft includes a mix of Airbus A320 family, ATRs, and leased wide-body aircraft
• Order book of around 945 aircraft, including A320/A321 NEOs, A321 NEO XLRs, and A350s
• Deliveries scheduled in a phased manner till 2035
• Plans to add more than one aircraft per week over the medium term

ICRA expects IndiGo's net debt to EBITDAR ratio to remain between 1.70-2.00 times over the medium term, despite the planned fleet expansion.

Dividend Announcement

In a positive development for shareholders, IndiGo has announced its first dividend in six years, signaling confidence in its financial stability and future prospects.

Challenges and Mitigations

While the airline faces challenges such as geopolitical tensions and potential travel hesitancy, it is actively mitigating risks through:

• Expansion of international operations
• Introduction of wide-bodied aircraft
• Launch of business class model (IndiGo Stretch)

The credit rating upgrade underscores IndiGo's resilience and strong market position in the Indian aviation sector. As the airline continues its expansion plans and maintains its financial discipline, it appears well-positioned to capitalize on the growing demand for air travel in India and beyond.