More aircraft will lead to lower fares: IndiGo President

THE HINDU,17AUG2015

IndiGo placed record 250 aircraft orders with Airbus, keeping in mind the growth potential in India in the next decade or so. And, more aircraft will lead to lower fares, a top official said. “India is a very under-penetrated market. Around 8.4 billion people travel through trains and less than one per cent of them fly. This indicates a huge opportunity in the coming years and a telecom-like revolution is definitely possible,” IndiGo’s President Aditya Ghosh told The Hindu in a telephonic interview. He pointed out that a Delhi-Bengaluru return ticket, which cost Rs.20,000 ten years ago, has now come down to Rs.12,000, despite an increase in fuel, wage cost and inflation.

“This is because the supply of aircraft has increased to 400 from 100. If we, as an industry, can increase the number to 1,000-1,600 aircraft and look at the benefits, we can accrue in terms of reduction in fares,” Mr. Ghosh said. He also said the aviation growth was linked to the GDP growth. “If you look at it from a 10-year perspective — let us say 2004 to 2013 — passenger numbers grew at 1.8 times the GDP growth. We have clearly noticed that there is a correlation between GDP growth and rise in passenger numbers. We are gearing up for the future growth story.”

Mr. Ghosh also said that the delivery of new aircraft would start from 2018, and some of it would be replacements.