When it comes to aviation, there is never a dull day. In the past seventeen years, IndiGo has become an airline that has been a force to reckon with in India, with their consistent 55-60% market share, clockwork inductions of aircraft and a 300+ aircraft fleet today. All of this was done on a straightforward premise: a uniform experience wherever you fly with them across the country or other parts of the world. However, that model scales only so far, and 106 destinations later, the model has started to reach its edge.

As IndiGo grows, they have shown remarkable openness to experiment with new things and concepts, which may be fundamentally different from the basics that IndiGo was built on. For instance, they have Boeing 777 aircraft on damp lease from Turkish Airlines right now. They are exploring an order of widebody aircraft of their own.

And today, in the earnings call, IndiGo’s CEO confirmed what some of us in the loyalty space have known for a while. IndiGo is working on launching a loyalty programme. One of the things that IndiGo’s CEO, Pieter Elbers, mentioned today as the pillars for IndiGo for fiscal 2024,

the commencement of foundational work for customer loyalty program that will enable further customer loyalty

I almost thought I misheard that because it was a comment made in passing from prepared notes. Then, IndiGo’s CFO, Gaurav Negi, also mentioned in response to an analyst query that IndiGo needed to have cash on hand for their upcoming loyalty programme.

IndiGo’s motivation behind launching a loyalty programme

While there are various ways of looking at IndiGo’s motivation to finally look the way of a loyalty programme to increase loyalty:

• They see competition from a sizeable full-service carrier in Air India (Group) now that Vistara and Air India will merge. Jet Airways was also supposed to be back in the market, which would have meant two full-service carriers.
• The airline has yet to see much success with its 6E Rewards programme, a greed initiative to serve some IndiGo coins to customers. However, with two card issuers, the airline only saw 300,000 people sign up for the card, which is terrible for the biggest airline in the country. They need to change course to a full-blown loyalty programme.

IndiGo has already made the initial recruitment for the leadership of this position, having hired someone who was the number two at a prominent loyalty programme in India back in the day.

Bottomline

IndiGo is making the first moves on the launch of a loyalty programme shortly. The leadership hire for this role was made about eight months ago, and now IndiGo has made it official that they have been working towards launching a customer loyalty programme.

What do you think will be the revenue accretion to IndiGo with a customer loyalty programme?

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