– Opens reservation for third daily Bengaluru – Chennai flight
– Starts selling additional flights on Mumbai – Ahmedabad sector
– Completes utilisation for four rotations
It is fascinating to see a well capitalised airline build its network. I tracked IndiGo rotation by rotation till about 120 aircraft when I lost track of it. The next one to track was AirAsia India and Vistara. While Vistara remains unprofitable till date, it did create its own differentiation if not niche. AirAsia India on the other hand, ended up as a disaster especially considering the tall claims and loud statements that were made.
Why is an airline network important? Old timers and regulars still refer to the 0700hrs flight to Ahmedabad from Mumbai by Jet Airways being the most preferred flight. While both the TATA investments at AirAsia India and Vistara have been loss making, Vistara built a network which has not seen a single station being closed while AirAsia India has been in and out of so many. The end result? Vistara, which started later, reached second spot in market share whereas AirAsia India is fixed at sixth!
A good network gives you passengers and with passengers comes a fighting chance towards profitability in a cut throat market like India. A bad network drains the whole airline!
Connecting the dots – the new routes
The airline is launching flights between Chennai and Kochi effective Sept. 26, 2022. The daily flight will convert this monopoly route to Duopoly. The airline will also up frequency between Bengaluru and Chennai to thrice daily from currently advertised twice a day flights. Pre-COVID, the sector saw approximately 1,000 passengers per day each way (PDEW). The numbers are two-thirds of that right now. Market share often mirrors capacity share and Akasa will have 23% capacity share and the sector will see a growth of 30% in capacity. The numbers could change if IndiGo decides to add a frequency (or two) on the sector.
The airline will also introduce its third daily Bengaluru – Chennai flight from the same day. The aircraft would operate Bengaluru – Chennai – Kochi – Chennai – Bengaluru. This sector has almost been vacated by all other airlines with AirAsia India having a sole flight and will see a direct battle between IndiGo and Akasa Air.
The gap in rotation of Mumbai based aircraft has been filled up as the airline opened up a morning flight to Ahmedabad – which will have the airline offer 20 weekly services between the two cities.
The block times for now are inflated. This will help the airline maintain On Time Performance but could well give a false feeling of higher utilisation. As more aircraft are inducted, there will be pressure on slots and adjustments to the block times is my guess.
The four aircraft which are progressively being opened for sale would current operate as below
IndiGo is bound to react. The airline has already upped capacity on Bengaluru – Kochi, Bengaluru – Ahmedabad and Mumbai – Ahmedabad. When AirAsia India withdrew from its first route of Bengaluru – Chennai, it was actually the increase in frequencies by Jet Airways which had a larger impact as compared to IndiGo’s which was holding steady with capacity but playing with the fares.
But Jet Airways used a different weapon than IndiGo. The airline deployed its ATRs on the route. The ATR ensured that Jet Airways could increase the frequency to offer more options to the market but moderate the capacity since it could carry only 72 passengers unlike the 168 seater B737. IndiGo today has the same weapon which Jet Airways had then – the ATR!
There are two ways of looking at the cost. The first is CASK (Cost per Available Seat kilometer) where the total cost is divided per seat kilometer. This implies that higher the capacity, lower the cost per seat. The other is the trip cost, where the cost of operating a particular sector is considered. The ATR has a lower trip cost than the A320 (reasons being turboprop over jet, smaller aircraft, etc) but the cost per seat (CASK) is higher than the A320.
Will IndiGo make that move on one sector or will it think the opposite and deploy the A321s or add a frequency (or two) on the A320s and play around with the fares to push Akasa?
What next for Akasa?
Which dots are not connected yet? Mumbai – Kochi, Chennai – Ahmedabad, Ahmedabad – Kochi. Will these cities see flight operations first or will there be a new station/base to be launched? The airline has started operations between metros which come under the Category-1 route under the Route Dispersal Guidelines (RDG). Sooner or later, the airline will have to launch flights to either Srinagar/Jammu or two points in the North East.
My guess, it will be Guwahati. Traditionally airlines have relied on Guwahati – Imphal or Guwahati – Bagdogra routes for the initial launch. Will Akasa follow the same pattern or look at Agartala which has had a new terminal and apron being inaugurated recently? Or will it look at Dibrugarh which has seen its runway length being increased and has a steady flow of travellers thanks to projects of national importance in the area?
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