IndiGo gets a step closer to UK foray, Spicejet may join in too

Indian low cost carriers (LCCs) IndiGo and Spicejet have gone a step ahead in their plans of starting flights to the United Kingdom. This comes in the backdrop of the collapse of Icelandic LCC WOW Air.

IndiGo has plans of going to London Stansted! Initial reports based on the court filing by Delta against JetBlue had shown IndiGo holding slots at London Gatwick. Back then, this website had not carried any article since slot filing, approval and returning of slots is a very common airline practice and continues from season to season. All airlines worldwide try to get slots at airports which are on their radar for immediate or near term expansion and return the same to the airport based on the deadlines defined by IATA. As of now, the airline continues to hold slots at Gatwick but the slots are not at same time daily which would have made the airline look at Stansted as an option for the flights to India.

New data shows that IndiGo intends to operate flights to Birmingham from Amritsar and to London Stansted from New Delhi and Bengaluru. Rival Spicejet also intends to operate to Birmingham from Amritsar and if both plans materialize then Spicejet would fly non-stop while IndiGo will fly one-stop.

The Summer Schedule starts on 31st March this year and the final slot holding is known closer to this date. However, even with confirmed slots, unlike the past when only slot requests were filed, there is no guarantee that the airline will operate and the airline can still handover the slot back to the airport citing any reason.  Any handover of slot, before the flights begin are not considered for calculation of slot utilization.

The data released by the slot management company for certain airports in United Kingdom shows both IndiGo and Spicejet’s intentions to fly to Birmingham, while IndiGo firming up their presence at London Stansted with flights from Bengaluru and New Delhi.

UK has always been a relatively higher yield destination for Indian carriers and helps transfer a lot of traffic to airline partners from the United States. 2018 saw close to 30 lakh passengers travel between UK and India on direct flights while the three middle eastern carriers, Turkish Airlines and European carriers vie for the Indian traffic to London. Airlines from CIS have been successfully wooing Indian travelers from the northern part of the country to fly to UK via their hubs in Turkmenistan, Uzbekistan and Kazakhstan.

London Stansted

IndiGo intends to operate 174 departures in the entire season with flights to Bengaluru and New Delhi. This further indicates that the flights would start later in the schedule. Flights will be operated with the 222 seater A321neo and the airline intends to offer 77,256 seats.

Birmingham

IndiGo and Spicejet plan to operate services to Birmingham from Amritsar. The summer 2019 schedule would be operational for 209 days and IndiGo has asked for 52 Air Traffic Movements (ATM) which makes it 26 days of operations. The airline could then start the services on 1st of October, if it plans to offer daily services or earlier if it plans non-daily operations. The airline will offer 11,544 seats which makes it clear that the airline intends to operate its A321neo which is configured in 222 seats, for this route. So far, news reports have indicated that the airline will opt for Baku as its technical stop. However, the airline could well use the new Istanbul airport in Turkey as its technical halt.

Spicejet, on the other hand, holds approval for 258 ATMs, which are 129 departures and 68,886 seats on offer which probably translates to 267 seater A330.

London Gatwick

Both IndiGo and Spicejet – which had filed for flights to Gatwick from New Delhi, continue to hold limited slots at the airports. Spicejet has planned for 21 flights with 267 seater aircraft from New Delhi, while IndiGo in its initial filing had a daily flight for the entire season starting 31st March (which we know the airline isn’t starting) with A321neo comprising of 222 seats.

Bilaterals

India & UK have restricted bilateral for flights to London Area which includes the four airports of Heathrow, Gatwick, London City and Stansted. This restriction is applicable only for flights from/to Mumbai and Delhi. Jet Airways recently cancelled seven flights a week, as it handed over the slots for its third Mumbai – Delhi flight, back to Delta. There are currently 14 flights per week available between Mumbai / Delhi and London Area.

 

There are no restrictions to flights to London from any other city in India and no restrictions to any other point in UK from any city in India. Thus flights to Birmingham will be unrestricted, while those between Bengaluru and London Stansted will also not be counted under the bilateral quota.

With 14 frequencies available, Vistara having received permission to fly International and expecting their B789s in less than 12 months time, it is a race to the finish line for airlines to grab whatever they can, at the earliest!

Preparations

Both the airlines have been preparing for their foreign foray with IndiGo signing their first code-share agreement with Turkish which opens up 20 destinations beyond Istanbul for the airline. The code-share is already live on certain routes.

Spicejet recently signed up with Amadeus to sell seats on the Global Distribution System (GDS), which will help the airline solve the distribution issue partially.

Challenges

The last one month has seen suspension of transit flights over Pakistani airspace. This has led to Spicejet suspending their operations to Kabul and IndiGo having to plan their Istanbul operations with a stop at Doha. IndiGo has also delayed the launch of their second flight to Istanbul from New Delhi.

Spicejet is currently affected by the grounding of 13 of its B737 MAX8 aircraft and is running a truncated schedule while it tried to opt for a mix of wet lease and dry lease aircraft. This will put considerable strain on the balance sheet – for an airline which has seen its debt rise over the last couple of years.

While the dry lease market has good availability of A330 aircraft, there are few carriers who are also offering an ACMI (Aircraft, Crew, Maintenance and Insurance) option. While expensive than dry lease, this option could be something which will help Spicejet quickly launch the operations to test waters and vacate the market if the operations are not profitable. A dry lease will bleed the airline more, if the operations are not successful.

 

Every information in this report is based on data available in public domain

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