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IndiGo granted international route permissions. How will it operate Singapore? – Bangalore Aviation

IndiGo granted international route permissions. How will it operate Singapore?

Last week, the Indian ministry of civil aviation granted Gurgaon based low fare carrier IndiGo permission to commence its international operations in August with flights to Dubai, Bangkok and Singapore ex-Mumbai and Delhi and to Muscat ex-Mumbai.

The Dubai and Muscat routes are a bonanza for the airline. Mumbai and Delhi are the two largest markets in India. There is a large movement of the labour and “trader” market which prefers a low fare carrier.

The single most served international route ex-India is the Mumbai-Dubai sector. All gulf based carriers both legacy and low fare serve this route and insiders indicate that Emirates airline is expected to receive permission for a sixth daily flight very shortly.

From an aircraft perspective too, the A320s in IndiGo’s fleet will perform both destinations from Mumbai and Delhi with ease.

Dubai will also be a good route for “first time international tourist”. Expect IndiGo to tie up with package tour companies, a strategy its competitor AirAsia has failed to adopt.

Bangkok too will have a similar tourist profile, but no labour traffic and again the destination can be operated by the A320 from both Mumbai and Delhi without any load penalty. IndiGo will add competition to Thai AirAsia on the Delhi-Bangkok route and to Thai Airways ex Mumbai.

Computer visualisation IndiGo Airbus A320neo Pratt and Whitney Geared Turbo Fan engineSingapore though is intriguing. It has all types of traffic, business, tourist and labour. Till it starts receiving the Airbus A320neo in 2016, the problem for IndiGo is distance. Its current fleet of A320’s cannot operate non-stop to Singapore from either Mumbai or Delhi without a significant load penalty (leaving 20~40 seats empty and tanking up extra fuel). This will jack up costs and goes against the grain of the IndiGo business model. It is doubtful the carrier will opt for this.

Another option will be for IndiGo to operate via Bangkok, but without fifth freedom rights it will not be able to pick-up passengers on the Bangkok-Singapore v.v. segments and again operating a flight half full is not in the airline’s model.

So how does IndiGo service a lucrative market like Singapore?

The ideal origin city in India for Singapore is Chennai which has historic social, trade and labour links going back two hundred years. However, it is very doubtful IndiGo will be able to obtain permission due to the politically powerful and Chennai based Maran family which now owns SpiceJet who would like to restrain competition on a route they will eventually service.

It is most likely IndiGo will push the ministry for permission to operate Singapore from Kolkata where it has a major presence, and may be Hyderabad where fuel is significantly lower in price.

The Kochi (Cochin) option is not very promising right now. The newly appointed civil aviation minister is from Kerala. With his strong trade union and public sector credentials, is unlikely to grant permissions to a private upstart to the possible detriment of national carrier Air India or its low cost subsidiary Air India Express.

It is also very doubtful IndiGo will initially test the Singapore waters from Bangalore, a city which prides itself on a “higher profile” of corporate and IT passengers who are loathe to fly low cost on the company account. The lack of “trader” or labour traffic who are the preferred target segment add to negative.

Bangalore has been the graveyard for foreign LCCs, having seen the arrival and withdrawal of three low cost carriers already, JetStar Asia, Nok Air, and most recently Tiger. Even AirAsia has cut-back services to the city.

Sources inside IndiGo have previously informed Bangalore Aviation that the carrier will not repeat the strategic mistakes made by foreign LCCs. It will engage with travel agents and also address the corporate and package tours markets.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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