Analysis: IndiGo plots international and domestic expansion

Less than a year after it commenced international operations, India’ s largest low cost carrier (LCC) IndiGo, is planning a massive expansion of its Dubai operations, adding four new flights to its current two daily flights (one each from Mumbai and Delhi). Additionally, the carrier will add a second daily flight between Delhi and Bangkok.

The carrier, which operates 57 Airbus A320-232 aircraft and holds a 24.9% share of India’s domestic air travel market, currently serves 5 international ports (Bangkok, Singapore, Muscat, Kathmandu, and Dubai) as well as 27 cities across India.

IndiGo will commence daily flights between Chennai, Cochin, Hyderabad and Dubai, as well as add a second daily flight between Delhi and Dubai.

Thanks to smart scheduling, IndiGo has managed to schedule all 4 daily Dubai flights on just two aircraft – affording it a high level of utilization, with rotations as follow:

Aircraft 1
6E 66 – Dubai – Chennai– D: 22:20 A: 04:15(+1) — Daily — Effective 25th August
6E 65 – Chenai – Dubai — D: 07:30 A: 10:30 — Daily — Effective 25th August
6E 68 – Dubai – Kochi (Cochin) — D: 11:30 A: 17:15 — Daily — Effective 25th August
6E 67 – Kochi (Cochin) – Dubai — D: 18:15 A: 21:15 — Daily — Effective 25th August

Aircraft 2
6E 23 – Delhi – Dubai — D: 02:30 A: 04:35 — Daily — Effective 7th August
6E 25 – Dubai – Hyderabad — D: 05:35 A: 11:05 — Daily — Effective 7th August
6E 26 – Hyderabad – Dubai — D: 13:20 A: 15:45 — Daily — Effective 7th August
6E 24 – Dubai – Delhi — D: 16:45 A: 21:50 — Daily — Effective 7th August

The flight schedule for its Bangkok flights are as follow:

6E 43 – Delhi – Bangkok — D: 18:25 A: 12:10 (+1) — Daily — Effective 10th August
6E 44 – Bangkok – Delhi — D: 01:10 A: 04:10 — Daily — Effective 10th August

These flights in turn complement the current daily Bangkok flights and allow all Bangkok flights to be operated with one aircraft, whose only down time is a 2 hrs 50 minutes period in the mid afternoon in Delhi.

6E 41 – Delhi – Bangkok — D: 05:35 A: 11:20 — Daily
6E 42 – Bangkok – Delhi — D: 12:35 A: 15:35 — Daily

IndiGo has given indication that it has received all the required regulatory, government, and airport approvals from relevant authorities in India as well as from Dubai, United Arab Emirates and Thailand to launch these services and it has already put tickets on sale via its website. Introductory fares will begin at Rs. 11,200 return (round trip) for all flights in question.

Taking advantage of Kingfisher’s fall 

Image courtesy and copyright U. Krishna

Undoubtedly, IndiGo has been one of the largest beneficiaries of the 65% capacity reduction, earlier this year by Dr. Vijay Mallya promoted Kingfisher Airlines. The only profitable Indian airline has grown its market share from under 20% to a robust 25%, all the while benefiting from the rise in fares caused by the constriction in capacity.

IndiGo has indeed taken the opportunity to fill the void left by Kingfisher through prudent expansion in large markets from the Metros, whereas competitor SpiceJet has instead focused on filling in the gaps left behind in Tier II and Tier III by the withdrawal of Kingfisher’s fleet of ATR 72-500 turboprop aircraft. For example, the airline added two more daily flights between Mumbai and Delhi on May 25th, bringing their total offering on the route to 11 daily flights.

Upon the announcement, IndiGo CEO Aditya Ghosh said;

“In line with our endeavor to meet the requirements of both business and leisure travellers, we have introduced two new daily direct flights between Delhi and Mumbai. We are looking at providing affordable fares on these new routes for 6E travelers. IndiGo will continue to expand its network to meet the requirements of both business and leisure travelers wherever they demand it. It is our constant endeavour to provide more flexibility of choice for our customers as IndiGo continues to offer them on time, hassle free and always affordable flying experience.”

Beyond these new rotations, IndiGo also took advantage of a recent slot auction at Pune Airport in Western India near Mumbai to add a second daily Delhi-Pune rotation, as well as add new daily Hyderabad Pune services.

The schedules for the new Pune flights are as follow:

6E405 – Delhi – Pune — D: 18:25 A: 20:30 — Daily — Effective 25th June
6E402 – Pune – Delhi — D: 21:00 A: 23:05 — Daily — Effective 25th June

6E313 – Hyderabad – Pune — D: 14:25 A: 16:00 — Daily — Effective 25th June
6E306 – Pune – Hyderabad — D: 16:30 A: 17:50 — Daily — Effective 25th June

On the international front, SpiceJet too saw some opportunity, and added its own set of daily flights from Mumbai and Delhi to Dubai recently, marking the first foray for India’s second largest LCC outside of the SAARC countries.

For IndiGo and SpiceJet both, there is no question that Dubai has the potential to be a very lucrative route with its humongous base of migrant, tourist, and VFR (visiting friends and relatives) traffic, not withstanding the enormous business ties with India. Yet at the same time, there may be signals that the India-Dubai market might be reaching saturation, with private operator Jet Airways recently cancelling its Hyderabad-Dubai and Chennai-Dubai services.

IndiGo recently won approval from the Ministry of Civil Aviation for services Kathmandu, Dubai, Bangkok, Singapore, and Jeddah. The carrier was given rights to add up to 20,000 weekly seats on these routes, and the currently announced routes

1000th 777 built. Boeing image

add just 6,300 weekly seats. So there is definitely room for IndiGo’s expansion. In particular, more services to Dubai can be expected, as the carrier won approval for eight daily flights to Dubai but has added just six ( two from Delhi, and one each from Mumbai, Chennai, Hyderabad, and Kochi).

There is definite potential for IndiGo to expand further Dubai services, it could consider services from India’s technological capital and third economic city, Bangalore, or a second daily from Mumbai, or even Chennai, however, in all these cities IndiGo will face fierce competition from Dubai based behemoth, Emirates airline, which operates multiple wide body flights between these Indian cities and Dubai, besides offering global connectivity.

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