Two years ago Pieter Elbers seemed to have landed in a dead end. He was with KLM Royal Dutch Airlines for 20 years, from 2014 as CEO, and the conflict with Ben Smith, head of the parent company Air France-KLM Group, had been simmering for years. It was about rivalries between Air France and KLM, about the degree of freedom that Elbers and his people wanted to take, especially since they always earned more money than their colleagues in Paris. Eventually it was enough and Elbers announced his departure. He had just turned 50.
“One of those days you never forget,” says the company boss
Then, on Monday afternoon, Elbers showed up beaming at the Airbus Chalet. It was the first day of the Le Bourget Aerosalon, the biggest aviation show of the year. French President Emmanuel Macron walked the area in the morning and watched the flight demonstrations. But it was up to Elbers to announce the first big deal: his new employer Indigo would buy 500 of the planes A320neo-Family for short and medium-haul routes at Airbus, one of the largest orders ever placed. “In a professional life there are a few days that you never forget. Today is one of them,” said a visibly touched Elbers.
Indigo is one of the most amazing success stories in the industry. The private airline was founded in 2006 and as a pioneer should also establish the principle of low-cost airlines in India. India and aviation, the obvious association up until then was Air India, and it wasn’t a good one. Because the state carrier was known for its inefficiency, its outdated, small fleet, the unpunctuality and the horrendous bureaucracy. What Air India should and should not do was ultimately decided by the government, not management.
The Indian government wants to expand the airport network
Three years after the start, Indigo made a profit for the first time, nine years later the company went public, and by 2018 the fleet had grown to 200 aircraft. Indigo now flies to 78 domestic and 26 international destinations. Even before Monday’s massive order, Indigo had ordered a fleet of nearly 300 aircraft and nearly 500 more. So now there are around 1,000 aircraft that Airbus is to build for the Indian airline in the next few years – calculated around two annual productions of the A320neo family.
India is currently the fastest growing market in aviation – according to Airbus, demand on domestic routes will grow by around seven percent a year, a good three times as fast as in Europe or North America. The question, however, is whether the infrastructure will support all the growth. The Indian government is planning to significantly expand the airport network. Around 140 airports are currently able to handle large passenger jets. 80 more are to be added over the next two years. Indigo benefits from the fact that neither car nor train are a real alternative for longer distances in the country. In addition, a large middle class is emerging that can afford at least occasional air travel.