Once grounded by pandemic induced uncertainty, the budget carrier IndiGo has now soared to become the world’s most valuable airline, at least briefly, surpassing international giants like Ryanair and Delta.
The Indian budget airline’s shares have rallied a staggering 170% from their pre-Covid levels, pushing its market cap to over Rs 2 lakh crore (around $23.3 billion). While most global airlines are still navigating post-pandemic recovery, IndiGo has taken off, and how.
Here’s a closer look at how this low-cost Indian carrier is aiming for global skies.
Big gains while others lag behind
At a time when the broader Indian market is reeling under pressure with Nifty falling around 6% this year – IndiGo share price has managed a 13% jump in its year-to-date (YTD) so far this year. In fact, it is one of the very few global carriers to beat pre-pandemic share price levels.
According to Indian Express, only Ryanair shares have shown a similar post-pandemic surge among global peers, while most US airlines are still struggling below their 2019 valuations.
This rally has helped IndiGo become the most valuable airline in the world, at least briefly, surpassing even Ryan Air, United Airlines, and Delta in terms of market cap.
Dominating domestic skies, eyeing international horizons
IndiGo is not just India’s largest airline , it is a giant with a market capitalisation of over 60% in the domestic aviation space. Apart from this, it is also one of the most preferred choices for millions of flyers.
But it is not stopping there. The real runway for growth – International routes. In its recent analyst call, the airline said it plans to increase the share of international operations to 40% of total seat capacity (ASK) by FY30, that is, up from 28% in FY25.
The budget carrier also plans to induct around 50 new aircraft in FY26 to strengthen its expansion, adding to its existing fleet of 439 planes.
This also comes in line with the airline’s largest-ever aircraft order in 2023, a whopping 500 narrow-body jets.
More recently, the company has announced a foray into hospitality, announcing its plans to build 300 hotels over the next five years. As part of this move, the company has partnered with French hospitality major Accor and invested in Indian hotel chain Treebo. Accor already operates 71 hotels in India and has 40 more in the pipeline.
Innovating for take-off: Damp leases and daily flights
As per the Indian Express report, to cope with this rising demand post pandemic, also be dubbed as “revenge travel wave”, the airline started using damp leases, where aircraft, pilots, and engineers are outsourced from a lessor, while IndiGo supplies the cabin crew. Though this increased its lease liabilities, it allowed the airline to capture market share quickly and ramp up capacity during a crunch.
On average, IndiGo operates around 2,200 flights a day with its current fleet, added the report. As a result, smaller planes, shorter distances, and quick turnarounds, in a way allowed each aircraft to complete multiple trips daily and make the most of their lease costs.
IndiGo Q3FY25 earnings
Not everything has been smooth sailing. The low cost carrier reported a net loss of Rs 987 crore in Q2FY25. However, it bounced back with a Rs 2,449 crore profit in Q3FY25, even though it was lower than the previous year’s festive season boosted numbers.
On the revenue front, the budget carrier reported a 14% YoY growth in Q3, touching Rs 22,111 crore, supported by increased capacity (ASK) and passenger demand (RPK). The airline’s load factor, a key metric showing how full its flights are, rose to 86.9%.
Now, looking at: can it truly beat Ryan Air? is still a question. While Ryanair remains a strong competitor in Europe, IndiGo’s rise reflects a broader shift, India’s aviation sector is entering a golden era, and IndiGo is leading the charge so far as of now.
With inputs from Smart stocks, Indian Express