IndiGo in Talks with ATR, Embraer, Airbus for Regional Fleet Boost

IndiGo, India’s largest airline, is in negotiations with ATR, Embraer, and Airbus as it looks to order at least 100 smaller aircraft as part of its strategy to expand its regional network.

Currently, IndiGo operates 45 ATR-72 planes, each with 78 seats, and is scheduled to receive five more this year. Industry insiders suggest that IndiGo is likely to continue with ATR due to the benefits of economies of scale. However, the Airbus A220 and Embraer E-175 jets are also being considered.

This regional expansion follows IndiGo’s recent investment in the international long-haul market, as evidenced by its April 25 announcement of an order for 30 Airbus A350-900 wide-body aircraft.

While ATRs are turboprop planes, the A220 and E-175 are jets. IndiGo’s current fleet also includes Airbus A320s and A321s, along with two Boeing 777s leased from Turkish Airlines under a codeshare agreement.

IndiGo, which commands 60% of India’s domestic air traffic, is targeting smaller towns where air travel demand is expected to rise due to improved airport infrastructure and the government’s UDAN scheme aimed at enhancing regional air connectivity. ATR has projected that India will become its largest market within the next decade due to this increased regional connectivity.

“People want more convenience and a faster way to travel,” said Jean-Pierre Clercin, ATR’s Asia-Pacific commercial head, in February. “While other transport modes are growing, they aren’t keeping up with demand. Thus, regional aviation has a crucial role to play.”

An ATR spokesperson declined to comment on the ongoing commercial discussions, and representatives from IndiGo, Embraer, and Airbus also did not provide comments.

IndiGo entered the regional aviation market in 2017 with an order for 50 ATR-72 planes, breaking SpiceJet’s monopoly with its Bombardier Q400 planes. Since then, IndiGo has expanded to about 60 destinations, including Gondia, Lakshadweep, Jagdalpur, Jharsuguda, and Dharamshala.

An IndiGo executive noted that the ATR-72s have been instrumental in cost-effectively developing new routes that initially could not support the larger Airbus A320’s capacity. “Once IndiGo establishes reliable connectivity, the market size grows, enabling the use of larger A320 or A321 jets,” the executive explained.

The financial struggles of competitors have led to their withdrawal from UDAN routes after the three-year exclusivity period. For example, SpiceJet ceased flights to Jharsuguda after IndiGo began operations there in October.

A local travel agent mentioned that IndiGo’s presence has enhanced service reliability with minimal cancellations. The smaller aircraft also offer flexibility, allowing operations between cities during off-peak hours.

Government officials anticipate increased investments in regional connectivity post-elections, recognizing their role in boosting economic productivity. Civil aviation minister Jyotiraditya Scindia stated in January that the government plans to invest Rs 1 lakh crore to increase the number of airports from 148 to 200 within the next four years.

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