InterGlobe Aviation Becomes the Third Largest Airline by Market Cap

A Rapid Ascent

IndiGo Airlines, owned by InterGlobe Aviation, launched its commercial operations in 2006 as a private company and went public in 2015. Following a low-cost carrier (LCC) business model, IndiGo has swiftly ascended to become the largest airline in India, boasting over 60% of the domestic market share. As of December 2023, it operates a fleet of over 350 aircraft and conducts more than 2,000 flights daily. Impressively, IndiGo became the youngest airline globally to serve 100 million customers in a single calendar year, achieving this milestone in 2023.

An Expansive Fleet and Network

IndiGo’s fleet primarily comprises narrow-body aircraft, including 94 Airbus A321 Neo, 191 A320 Neo, 31 A320 Ceo, 45 ATR, 3 A321 Freighter, and 2 Boeing 777, as of February 29, 2024. The airline has a far-reaching network, connecting 88 domestic and 33 international destinations as of March 2024, along with 49 additional destinations via codeshare agreements with eight major global airlines.

Top Three Airlines Stocks by Market-Cap

In fiscal 2024’s first nine months, IndiGo achieved a net profit of Rs 6,278 crore with a total income of Rs 52,726 crore. This marked a significant turnaround from the net loss of Rs 1,224 crore on total income of Rs 41,281 crore in the same period of the previous year. By December 31, 2023, the company’s net worth turned positive again, and its stock hit a record high of Rs 4,100 on the National Stock Exchange, boosting its market capitalization to over Rs 1.5 lakh crore. This surge made IndiGo the third-largest airline company by market capitalization globally, trailing only Delta Air Lines and Ryanair.

Market Share and Future Expansion

IndiGo’s focus on growth and extensive network has solidified its position as a market leader. For fiscal 2024, IndiGo held around 62% of the domestic market share, with steady growth since 2007. In the international segment, it holds a significant 18% market share, contributing to 43% of the international segment held by Indian carriers. With an order book of 960 aircraft, IndiGo’s fleet is poised to expand even further, reinforcing its already dominant market position.

Operational Excellence and Resilience

IndiGo has a reputation for operational excellence, with strong passenger load factors (PLFs), reliable on-time performance, and low cancellation rates. The airline’s cost leadership approach has given it a competitive edge, allowing it to weather industry downturns with relative stability. IndiGo maintained profitability with positive EBITDAR margins and profit after tax (PAT) for a decade (from 2009 to 2019) and returned to profitability post-pandemic, starting in the third quarter of fiscal 2023. The airline has consistently achieved PLFs over 80% even while expanding capacity, demonstrating its operational strength.

IndiGo’s trajectory suggests a bright future, with its continued focus on growth, operational efficiency, and strategic partnerships. This rising star in aviation is poised to reach new heights in the years to come.

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