India’s largest airline IndiGo, which for long was seen as a classic budget carrier, is betting on premiumisation for its wide-body, long-haul international operations that are expected to begin in 2028.The airline expects to start receiving the Airbus A350 twin-aisle jets from the June quarter of 2028, and the first 10 of the 60 A350s on order will come in a three-class cabin configuration — business, premium economy, and economy — with 16 lie-flat seats in business class, the carrier’s CEO Willie Walsh said Monday.Given the growing demand for premium cabin seats, IndiGo is also deliberating on increasing business class seats on the remainder of its A350s, and offering lie-flat business class seats on its narrow-body Airbus A321 XLR aircraft as well, which it will use on medium-haul and even some long-haul routes.IndiGo currently operates four A321XLR aircraft and plans to scale this to seven planes next year. The aircraft — the extra-long-range version of the A321 — is operating flights to Athens and Amsterdam for IndiGo. The XLR fleet will be used to expand further into the Asian region and select European destinations, while the A350s will equip IndiGo to operate deep inside Europe and potentially even North America.But product premiumisation won’t mean that the airline will take its focus away from the high level of cost discipline and efficiency it is known for. Walsh said that maintaining a lean cost base would be essential to making long-haul operations successful. Maintaining a low-cost structure — which Walsh described as core to the airline’s DNA — allows IndiGo to enter long-haul markets with a cost advantage over competitors, according to the IndiGo CEO.IndiGo not your typical budget airline anymore“I personally believe there’s a strong case for that (lie-flat seats in business class) given how we’ve seen premium demand strengthen right across the world. I’m sure you’ve heard many of the carriers that are operating long haul have highlighted how robust the demand for premium products is, and even we’re seeing that,” Walsh said in his first in-person interaction with reporters as IndiGo CEO.“It was also clear to us that to serve the long-haul international market, we needed to have flatbeds as part of the business class product. That’s what the customer expects today…we will have flats in the XLR as we expand it rapidly. So, you know we’re responding to what the market wants and I think we’ve got a very very good niche product,” Walsh said. An aviation industry veteran, Walsh took over the reins at IndiGo early August.Story continues below this adIndiGo already offers a tailor-made business class product — IndiGo Stretch — on select domestic routes as well as international flights operated using the Airbus A321 aircraft. Over the past couple of years, IndiGo has been pivoting away from being a classic low-cost airline to a fit-for-purpose carrier with varied product offerings — including premium cabin products — in line with the demands of specific market segments. A vast majority of its fleet, however, is made up of all-economy Airbus A320 jets that serve its dense domestic network and some short-haul international destinations.Premium cabin classes offer higher yields and profit margins to airlines than the standard economy class, and airlines across the world are shifting towards product premiumisation. Demand for premium classes has seen a notable jump post the Covid pandemic. By focusing on higher-paying segments over bulk passenger volume, airlines can increase margins, insulate themselves against volatile operating costs, and maximise the revenue from a flight.“At IndiGo, we are an airline with a low-cost (structure) but we do many things that low-cost airlines don’t…So our low cost base is in our DNA. It’s something we’re very proud of, and it has enabled us to facilitate the growth of aviation in the Indian market,” Walsh said.According to the IndiGo CEO, the airline will not compromise the operational efficiency of its core narrow-body short-haul operations to facilitate wide-body long-haul expansion. Compromising short-haul efficiency to feed long-haul routes is a mistake many airlines have made in the past. As IndiGo already operates a massive, high-frequency domestic network, wide-body flights will be naturally fed by existing flights without requiring costly redesigns of hub airport schedules.Story continues below this adFor IndiGo, inducting modern and fuel-efficient jets like the A350 and the A321 XLR will also be central to keeping operating costs low when competing against major global carriers with relatively older aircraft.IndiGo’s long-haul projectIndiGo sees significant potential in the international segment, given that Indian airlines account for 45% of India’s international air passenger traffic, while overseas carriers account for around 55%. When it comes to India-Europe passenger traffic, overseas carriers have an even higher share of around 70%, some of which is up for the taking for Indian airlines, particularly IndiGo and Air India.India is currently the world’s third-largest aviation market after the US and China, and is also among the fastest-growing major aviation markets globally. India’s aviation establishment wants to see homegrown carriers dominate international passenger traffic from and to India and major Indian airports transform into international hubs competing with major Asian hubs like Dubai, Doha, Kuala Lumpur, and Singapore.Over the past few years, major international hubs in West Asia and Southeast Asia have emerged as major connecting points for a substantial number of Indians taking long-haul international flights, with their home carriers having a notable share of India’s international passenger pie. But with two well-capitalised and growth-oriented airline groups in India now, the effort is to claw back that market share with more direct long-haul flights.Story continues below this adLast year, IndiGo launched long-haul flights to Europe and the UK using damp-leased Boeing 787-9 aircraft, but has now terminated the arrangement amid high costs due to airspace closures and surging jet fuel prices. But the premiumisation push seemed evident from those flights as well.On those damp-leased aircraft, the airline offered hot meals and in-flight entertainment to all flyers, and also had a long-haul version of its Stretch product complete with complimentary alcoholic drinks service, choice of three-course hot meals, some free amenities, and even lounge access.And this could very well be the broad template for IndiGo’s long-haul operations. Similar offerings are already available on the airline’s A321 XLR services to Athens and Amsterdam.According to Walsh, what IndiGo did with the 787 routes provides a clear indication of where and how the airline plans to deploy the A350s, which means that European destinations might be high on the airline’s priority list. Given the range of the A350s, the airline would be in a position to mount direct, non-stop flights to even North America and Australia.Story continues below this adOperating the damp-leased Boeing 787s allowed IndiGo to test long-haul dynamics and refine its strategy, confirming that its long-haul wide-body expansion plan is robust enough to compete against major global carriers. These operations also demonstrated strong cargo performance, which Walsh noted will be an essential component of the future A350 long-haul business model.