IndiGo Ready for International Expansion

The Independent Indian carrier IndiGo, currently the third largest airline in the country by domestic traffic, has bold plans to become one of the country’s top operators in the international market after placing a bumper order for up to 180 new aircraft, the largest ever commitment for new Airbus equipment.

The New Delhi-based carrier has come a long way since it inaugurated flights in August 2006 and according to official statistics from the Directorate General of Civil Aviation in India, handled just over 970,000 passengers in December 2010. This was achieved with a load-factor of 93.3 per cent, the highest of all of the country’s carriers during that month.

According to Flightbase (January 14-20), IndiGo's largest base is Delhi, from where the company serves 17 domestic points with 275 weekly departures). There are some limited opportunities to grow further in the country. However, with strong competition from Indian Airlines, Jet Airways, Kingfisher Airlines and SpiceJet over domestic skies and low yields in the home market, it is now likely to look overseas.

Source: IATA BSP for year ending November 2010

As per Indian aviation rules it will shortly complete the five years of trading required ahead of the approval of an international licence. From August 2011 it will be able to launch its first flights outside of the country and has already been granted international traffic rights to operate services to Singapore, Bangkok, Dubai and Muscat.

Source: Flightbase (January 14-20)

All these initial destinations are currently served, many by foreign operators and IndiGo plans to carve back some market share that has been lost over the past decades to international rivals. It has yet to confirm its proposed schedules and launch dates for the new services but with up to 180 new aircraft due for delivery it certainly has the capacity for rapid expansion.

With a one type fleet of Airbus 320 models, the carrier will be able to keep its cost structure low, and it is likely to compete strongly on price. Its growth will be targeted on two key markets South East Asia and the Middle East, serving a range of destinations within the five hour average flight range of the A320.

Other Indian airlines have already established strong links into the Middle East, most notably Air India Express, the low-cost subsidiary of the Indian national carrier, while international operators Air Arabia and flydubai are quickly expanding their activity in India, taking advantage of the huge migrant traffic to introduce more direct links to the region from some of India’s provincial cities.

Over 13 million passengers flew between India and the Middle East during the year ending November 2010, according to the latest IATA BSP data – the region holding the largest traffic share from India.