IndiGo’s “look east” expansion

IndiGo – India’s largest carrier by domestic market share and fleet has been on a rapid expansion on International routes in the recent months. While the expansion is planned across countries, the focus seems to be currently towards the east – partly due to the closure of Pakistani airspace leading to a detour for flights out of New Delhi – which is the primary hub for the airline.

Over the last few days, the airline has announced expansion to its current stations – Kuala Lumpur and Hong Kong. The airline had launched flights to Kuala Lumpur from New Delhi and Bengaluru from 15th November 2018, while Hong Kong was connected with Bengaluru effective 11th December 2018.

Effective 20th August 2019, IndiGo will introduce a daily non-stop flight to Hong Kong from Kolkata.

6E1791 CCU 2240 – 0455(+1) HKG

6E1792 HKG 0550 – 0740 CCU

Cathay Dragon is the only operator on this route, which operates six weekly flights with the Airbus A320 in dual class.

The airline will launch double daily flights between Chennai & Kuala Lumpur effective 15th July, where it can operate a single aircraft rotation at below timings.

6E1815 MAA0505 – 1130KUL

6E1816 KUL1230 – 1340MAA

6E1817 MAA1745 – 0030(+1) KUL

6E1818 KUL0130 – 0300MAA

The airline operates the flights to KLIA2 – the hub of rival AirAsia. The sector is serviced twice daily by Malaysian Airlines and AirAsia, while Batik Air serves the sector with daily flights which operate onwards to Medan, Indonesia. Air India Express was the last Indian carrier to operate the Chennai – Kuala Lumpur sector.

The airline has also re-launched its Bengaluru – Phuket flights with changed timings to better accommodate the holidaying crowd’s needs at Phuket.

Data released by Directorate General of Civil Aviation (DGCA) shows that IndiGo has managed to corner 3% market share on the India – Malaysia route since the launch of its flights in last quarter of 2018. The data for the first quarter of 2019 is yet to be released and the airline in all likelihood would have made further inroads into the markets.

India - Malaysia market.PNG

Bilateral Rights

Hong Kong is one the most congested airports and has an Air Services Agreement (ASA) with India which has a cap on frequencies and seats as a mix. With Malaysia, Indian carriers are at less than half the stipulated quota while Malaysian carriers have nearly exhausted the quota. The ASA allows Malaysian carriers to fly unlimited seats to 18 points in India, some of which are being explored by AirAsia and Malindo Air. The India – Thailand bilateral allows open skies to Phuket and only recently have Indian carriers started taking advantage of the provision.

Network Thoughts

The airline has opted to look at two extreme ends of the spectrum. In choosing Kolkata as its next connection to Hong Kong, the airline opted for the smallest market currently and the one which has least competition. Cathay Dragon operates the only non-stop on this route with six-weekly flights operated by dual class A320.

The Chennai – Kuala Lumpur route is the most popular route to Kuala Lumpur from India, comprising nearly 20% of all India – Malaysia traffic.

With both these routes, there is seamless connectivity to at least six to eight stations for IndiGo and the airline could look at stimulating the market with lower fares.

IndiGo’s international foray will not be as easy as its domestic expansion and it will be keenly watched by analysts across the world.

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