Business Standard

IndiGo to fly to Europe from next winter


India’s most profitable airline, IndiGo, will start low- cost flights to major European cities next winter. IndiGo will be the first Indian airline to do long-haul low- cost operations, which are already catching up as a global trend.

The airline has sought regulatory approval to operate flights to London, Paris, Madrid, and Hong Kong from New Delhi with Airbus A330 aircraft.

According to a senior IndiGo executive, the airline will begin with direct flights to these cities and price them at least 30 per cent lower than the prevalent rate. “The lowcost structure of IndiGo makes it ideal to offer a long-haul service. An airline’s cost is primarily towards fuel burn, aircraft acquisitio­n, and labour — all of which are among the lowest for IndiGo,” he said.

IndiGo’s cost per available seat kilometre is ~1.94, while the same for its low-cost rival SpiceJet is ~2.33. Among the global low-cost carrier ( LCC) majors, American airline Southwest burns ~3.52, while Ryanair in Europe spends ~1.45.

The airline may go in for dense economy seating with a few premium seats (with more leg space) along with unbundled products like meal, priority boarding, and seat selection for economy passengers. With A330-200, Level-Internatio­nal Airlines Group’s (IAG’s) low- cost airline provides 314 seats and 21 premium economy seats and has a six-level fare structure. Also, it’s likely to fly to secondary airports to take advantage of low-airport charge. For instance, in London, it will fly to Gatwick Airport instead of Heathrow and to Orly Airport in Paris instead of Charles de Gaulle Airport.

The IndiGo official quoted above said that the airline was also exploring to operate onward connectivi­ty to North American and other European destinatio­ns in order provide a convenient network to passengers. “Layovers boost the economics of long-haul flights by providing new points for traffic. And, centrally located hubs allow airlines to shuffle passengers between short- and long-haul routes,” the official said.

The company did not respond to queries sent on Saturday about its long-haul operations.

Globally, long-haul operations for LCCs are growing rapidly. According to OAG, an air travel Intelligen­ce company, this summer there will be more than 1,454 long-haul flights operated per week by 20 LCCs.

Last year, IAG, owner of British Airways, launched Level, a low-cost brand. Lufthansa is expanding its low-cost subsidiary Eurowings to new destinatio­ns. In Asia, Tony Fernandes-led AirAsia has successful­ly implemente­d the long-haul low-cost model through AirAsia X. The finalisati­on of longhaul operations through an organic way is perhaps an indication of IndiGo’s diminishin­g interest in acquiring state-owned Air India. IndiGo is the only airline which has so far formally expressed interest to invest in the national carrier. “We remain interested in acquiring the internatio­nal operations of Air India, but as we have said previously, we will explore the long-haul opportunit­y with or without Air India,” IndiGo president Aditya Ghosh said in last week’s post-results call with analysts.

Minister of State for Civil Aviation Jayant Sinha recently said the government would not carve out the internatio­nal business and instead look to sell it as an integrated airline.

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