IndiGo announces flights to Doha – will it interline?

IndiGo, India’s largest carrier by domestic market share, announced flights to Qatari capital Doha. The flights announced earlier this week will be effective 5th May, initially from Delhi & Mumbai. The airline had announced 6 new destinations – 3 each on domestic and international side during its analyst call post Q3 results. Madurai & Amritsar are operational while Mangalore will see services from 1st May. The airline launched its 6th International destination – Sharjah, on 20th March 2017. The only destination unavailable for booking is Dhaka.

Doha’s Hamad International Airport is the hub of National carrier of Qatar – Qatar Airways. Qatar Airways has repeatedly expressed interest to invest in IndiGo, the largest and most profitable Indian airline. There has not been a positive response from IndiGo. Recently, Qatar airways announced its intention to start a 100% Foreign Owned Airline in India.

IndiGo flights to Doha could affect Jet Airways the most, as it is grappling with slump in the Gulf market. With a lower CASK (Cost Per Available Seat Kilometer), IndiGo could well make Doha work with cheaper fares than Jet Airways.

Doha is connected with Delhi, Kochi, Calicut, Mumbai and Trivandrum by Jet Airways. IndiGo has announced flights from Delhi and Mumbai. The airline is believed to launch flights from Kochi, Trivandrum, Calicut and Chennai, thus competing with Jet Airways on all routes.

Future of Doha?

Barring Dimapur & Kathmandu, all other IndiGo destinations see more than one departure per day. Both these destinations were launched in April 2015 and late 2011 respectively. The airline is known to effectively connect a station to multiple points within its network.

IndiGo launched flights to Doha with a rather cheeky campaign – “Aap Qatar mein Hai” (meaning “You are in queue” in hindi). Qatar airways has heard this more often than not while it has reached out to India to grant additional seats and a revised Air Services Agreement. While Emirates, Etihad & Qatar depend on the Indian market to feed its European and American network and thus access to Indian markets is important for the growth of Middle Eastern carriers.

The launch of Doha by IndiGo will mean that more seats are utilized from the Indian side which will help Qatar Airways negotiate a revised ASA earlier than anticipated. With the National Civil Aviation Policy of 2016 in effect, the negotiation is based on utilization of rights by Indian side, unlike in the past.

Will the launch of flights to Doha pave way for the first interline or code share for IndiGo?

If at all Qatar Airways & IndiGo decide on an interline agreement or code share, there will also be a service differential. Qatar Airways is a One World member & SKYTRAX 5 Star Airline while IndiGo operates all economy aircraft.

A320neo and its impact on expansion

IndiGo has been facing head winds due to delayed delivery of the Airbus A320neo. The airline missed its revised guidance of 133 aircraft at the end of financial year. While the airline has said that it is happy with the fuel savings of the A320neo, the delivery schedule is severely impacted as Pratt & Whitney has promised a resolution only by Q3 of 2017.

This slowing down of expansion could well be a blessing in disguise for IndiGo. India is grappling with severe aircraft infrastructure issues which includes lack of slots at all major airports and airport closures across the country for runway re-carpeting or expansion.

IndiGo will operate to 47 destinations (Dhaka included) of which 39 will be domestic. The airline had launched only two new stations in 2016. Dehradun in March & Port Blair in September.

IndiGo was silent on announcements for new flights in the new year, even when Vistara announced launch of Amritsasr & Leh (Link) and Air India added flights to existing network (Link). I had anticipated something big from IndiGo & received many responses to my tweet.

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And it came – in the form of 6 new stations, 3 domestic and 3 international.

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The year could see more stations being launched internationally as domestic congestion affects slot availability.

When the A320neo stabilizes. . .

There will be challenges all around – starting with saturation, expansion of rivals, A320neo issues and fuel. In the hindsight, what looked like a brilliant decision back then to convert 30 A320ceo to A320neo doesn’t look like a wise decision anymore thanks to delays, which were unknown when the airline took the decision.

Airbus – Pratt & Whitney combine will most likely resolve issues related to A320neo engines by end of the year. As the A320neo stabilizes and gets certified for ETOPS operations, IndiGo could look at returning to Singapore from Delhi and Mumbai, thanks to the increased range of the A320neo.

Traditionally, the airline has restricted itself to metros followed by stronger market connections like Kerala – Gulf unlike rival Spicejet which has connected tier II cities effectively (Ahmedabad – Muscat, Madurai – Dubai) to International destinations.

Will IndiGo make international presence stronger by connecting Tier II cities (Madurai – Singapore / Ahmedabad – Sharjah) or will they stick to existing model and not launch flights to destinations in say Iran which could see links to just one or two cities in India. Just for the heck of speculation, the airline could look at expanding Bangkok, Singapore, Muscat, Sharjah operations and launch Kuwait, Colombo, Kuala Lumpur, Riyadh and Dammam. This is based on the range, traffic and ability to connect the new station to quite a few in the existing network. All of this would definitely dependent on how the gulf economy shapes up and the all-important availability of bilateral rights.

The domestic network will also see changes as the new Route Dispersal Guidelines come into effect later this year. IndiGo is capacity leader on most of the new routes which are getting converted to Category I. (Delhi – Pune / Patna / Goa). The airline will have to add frequencies to North east in the later part of the year.

The airline now distributes its inventory across the world post its deal with Travelport. The airline carried 392.65 lakh passengers in 2016 with a market share of 39.3% as per the Indian regulator. IndiGo operates to 36 of top 40 airports by domestic passenger traffic.

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