BT Explainer: Air India back with its long-haul monopoly as IndiGo ends widebody operations

Speculation surged in April when IndiGo’s UK and Europe bookings abruptly went dark across ticketing platforms, sparking fears of an exit from long-haul routes due to mounting losses. The airline downplayed the development as a temporary pause for internal realignment before reopening seats.

That reprieve was short-lived.

On July 31, IndiGo announced it will conclude all wide-body damp lease operations effective October 25, 2026, temporarily pulling the plug on services to and from London Heathrow until its own Airbus A350-900s arrive. The budget carrier pointed directly to a volatile operating environment and escalating geopolitical tensions for the sharp strategic retreat.

To jumpstart its global ambitions, IndiGo had damp-leased six wide-body jets from Norwegian carrier Norse Atlantic Airways. The expansion kicked off with a debut flight to Manchester in July 2025, quickly stretching to London, Copenhagen, and Amsterdam. However, with the aircraft leased in US dollars, a weakening rupee steadily squeezed operating margins.

Advantage Air India 

With IndiGo’s A350 deliveries not expected until 2028, Air India will hold an exclusive domestic monopoly on long-haul international routes post-October. Still, the legacy carrier isn't entirely unscathed; Air India has also trimmed its network to absorb soaring jet fuel prices, longer flight detours, and global instability.

IndiGo isn't abandoning Europe entirely. Routes between Mumbai and Amsterdam will transition to the long-range Airbus A321XLR. The airline remains committed to its long-term vision, having doubled its A350-900 order to 60 aircraft during FY 2026 and committing $820 million toward purchases through its GIFT City arm.

“This enabled IndiGo to commence services to markets in the UK and Europe, while accelerating the development of the operational capabilities, commercial expertise and customer insights required to support its future widebody ambitions. Over this period, the airline has been able to build critical competencies across long-haul network planning, customer experience, crew operations, maintenance, airport handling, revenue management, and international partnerships,” said the company.

The leasing dilemma 

The retreat comes amid a broader overhaul of IndiGo's fleet strategy. Chief Financial Officer Gaurav Negi recently informed shareholders that the airline plans to raise its finance-leased fleet from 17% to 30-40% by 2030, pivoting away from its historic reliance on sale-and-leaseback models.

Currently operating 416 planes, IndiGo’s fleet comprises 336 under operating leases, 69 under finance leases, and 11 under damp leases. While sale-and-leaseback arrangements provided quick liquidity, finance leases offer ownership-style control over an asset's lifespan.

IndiGo follows the model of sale-and-leaseback, where the airline sells an aircraft to a lessor and leases it back, generating cash but giving up ownership. A finance lease gives ownership-like control for most of an aircraft’s useful life, with payments structured like loan instalments and the aircraft recorded as an asset.

Ultimately, market forces outpaced the initial gamble.

The airline noted that since leasing the Nordic aircraft, airspace restrictions, elevated fuel prices, and severe currency pressures eroded route efficiency and schedule reliability. These factors created persistent economic headwinds in a risk-averse global aviation market, forcing a complete overhaul of its long-haul strategy.