IndiGo announces grand international plans, offers aggressive low fares

Indian low cost carrier IndiGo, which controls at 19.7% share of the domestic market, announced the launch of its international operations with the release of schedules and fares.

IndiGo airlines Airbus A320-232 VT-IEA
The airline which operates an all A320-232 fleet, completed the required five years of domestic operations recently, and has been granted permissions by the Ministry of Civil Aviation.

IndiGo will operate its maiden international flight on September 1, 2011 with is daily Delhi – Dubai service. During the month the airline will also commence daily flights between Delhi and Bangkok and Delhi and Singapore. On October 2, the airline will commence flights between Mumbai and Dubai and Mumbai and Bangkok.

IndiGo international schedules and promotional fares.IndiGo international schedules and promotional fares. Click on image for a larger view.

The airline has announced its plans with an aggressive promotional fare of Rs. 9,999 (all inclusive), which also is a shot across the bow of competitor low cost carriers flyDubai, AirAsia, Thai AirAsia and Air Arabia who have fares in similar sectors around Rs. 11,000~15,000.

Not willing to pay the premium charges of the new Terminal 3 at New Delhi’s Indira Gandhi International Airport, IndiGo will operate its international flights from Terminal 1D and Terminal 1C

Singapore operations on an A320 classic
An interesting question is how will IndiGo operate the Delhi Singapore route, a 5h15m flight, non-stop on an A320 classic. In all probability, IndiGo will increase the gross weight of the aircraft, tank up a lot of fuel, and take a load penalty i.e. fly with about 10~20 seats empty.

IndiGo has to expand internationally
IndiGo is following a different strategy compared to its competitor SpiceJet. SpiceJet which commenced its international operations last year, has restricted itself to SAARC destinations like Kathmandu and Colombo while increasing focus on Tier 2 and 3 Indian cities using the Bombardier Dash-8 Q400 turbo-props which the airline will shortly take delivery of.

With its all jet Airbus A320 fleet, each seating 180 passengers, near India (from the Gulf to Singapore), international operations are the logical choice for IndiGo.

Lucrative destinations, formidable competitors
There is no doubt of the demand on the routes IndiGo has received permission for. Bangkok, Dubai and Singapore though are well serviced by carriers across the value spectrum and from each of the country pairs. IndiGo will face formidable competitors. On the low cost front, AirAsia, Thai AirAsia, flyDubai and Air Arabia. On the legacy front, Emirates which is renowned for its massive capacity, some might say capacity dumping, ex-India, Thai Airways, Air India, Jet Airways, and Kingfisher follow an aggressive value for money strategy, while Singapore Airlines prefers to focus on passengers willing to pay a premium for their world renowned cabin service.

IndiGo will continue its winning strategy of focussing on punctuality and a hassle-free, no-nonsense, clean and simple service methodology. The airline will sell alcoholic beverages aboard its international flights which is banned on the domestic sectors. Sources at the airline confirmed that there will be no in-flight-entertainment system.

Focus on Indian passengers
In India, IndiGo follows a direct marketing model for ticketing, saving on GDS fees which can add from 5%~10% of the ticket price. However it is unclear how the airline plans to distribute tickets in the interntional destinations it will serve.

Unlike its competitors which have a limited domestic market, IndiGo can take a cue from SpiceJet which leverages the large Indian market and focusses almost exclusively on taking Indian passengers to a foreign destination and then relying on them to fill up the return flights.

Sooner or later though, IndiGo will have to start attracting passengers residing overseas, commencing with the Indians living there. IndiGo has to ensure it does not commit the blunders as AirAsia has done in India, in the overseas 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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