IndiGo seeks investors in battle for India’s skies

IndiGo seeks investors in battle for India’s skies
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IndiGo seeks investors in battle for India’s skies
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Updated 26 October 2015

IndiGo seeks investors in battle for India’s skies

IndiGo seeks investors in battle for India’s skies

NEW DELHI: Waiting for a flight at New Delhi’s Indira Gandhi airport, law student Shweta Toppo explains why she mostly flies IndiGo, the upstart budget airline preparing for a stock market flotation next week.

“They’re always on time, service is good and they’re cheaper. For students that’s always a good thing,” said the 19-year-old, en route to her university in the eastern city of Guwahati.
Toppo is the only person in her family to fly, one of the millions of new air travelers making India a tantalising prospect for airlines.
They include IndiGo, India’s only consistently profitable carrier, which hopes to raise about 30 billion rupees ($460 million) in the biggest initial public offering on the Bombay Stock Exchange in three years.
Although famous for its railways, India’s patchy roads, vast distances and rising disposable incomes have led cheap flights to take off, with domestic air traffic more than trebling since 2005, according to the Center for Asia-Pacific Aviation (CAPA).
Yet only 70 million of India’s 1.2 billion citizens flew on domestic routes in the 12 months to March this year, making the market just a quarter of the size of equally populous China’s.
Despite its vast potential India has proved painful for its airlines, most of which are beset by losses and laden with debt, while state carrier Air India has relied on government life support.
Defying the gloomy backdrop is IndiGo, which only started flying in 2006 but has risen rapidly to command almost 40 percent of its home market, the biggest share of any airline.
With its blue-purple-uniformed flight attendants, it is famed for its ultra no-frills approach, promising cheap fares, reliable service and a rare fixation with punctuality.
“We focus only on getting customers from point A to B safely along with their bags and serve food that will not make them sick,” IndiGo president Aditya Ghosh told a pre-IPO press conference.
Air travel in India is mostly confined to the four in every 10 people who live in cities, out of the reach of hundreds of millions.