With stagnant domestic yield, IndiGo bets big on West Asia
MUMBAI:InterGlobe Aviationpromoted budget carrier IndiGo, which will start its first daily flight between Amritsar and Dubai from October, is betting big on the West Asia to grow its fortunes overseas.
“We believe that the Middle East market still has a lot of potential for us,” IndiGo’s chief commercial officer William Boulter said in an interview. “And we are expanding our reach within the Gulf to include immediately Abu Dhabi and Kuwait, and then other destinations in the future.”
IndiGo, the largest domestic airline by marketshare, operates 60 daily return flights to West Asia, including 13 and eight flights connecting Dubai and Doha respectively. In addition, it has four daily return flights each to Sharjah and Muscat.
From October, IndiGo will have 64 return flights to West Asia daily.
IndiGo’s plans for West Asia follows stagnant domestic yield on the back of a falling rupee, increasing fuel price and a competitive market preventing it from raising fares. About 15% of IndiGo’s total capacity is dedicated to international operations.
“A majority of our international capacity is Gulf-based. Roughly about 12% of our total capacity is deployed there (on West Asia routes),” Boulter added.
IndiGo, one of the biggest customers for Airbus globally, has a fleet of more than 180 planes. “We see the Middle East as having some potential for us. It is a natural extension to our domestic flying, using the same aircraft type.”
“We fly with the lowest cost per available seat kilometre, among anyone. So, we are confident that the new flights will be profitable additions to our operations,” said Boulter.
IndiGo also plans to start flights to London’s Gatwick airport this winter.
The international market, especially West Asia, has a much better spread than the domestic market, said an analyst with a foreign brokerage, requesting anonymity. “Also, with the rise in oil prices, Middle East economies are recovering, so airlines like IndiGo will definitely be able to generate good yields in these markets.”