FlyAryastan – the LCC arm of Air Astana will add capacity to Delhi with thrice a week flights from Almaty. This is in addition to the twice weekly services it operates from Shymkent currently. The frequency addition is timed with IndiGo’s entry in the market. IndiGo is slated to start operations to Almaty from Sept 23, with thrice a week service while FlyArystan will launch the new frequency a day later.
The flights will operate at below timings and will complement the flights of its parent and full service carrier Air Astana.
KC7179 ALA0130 – 0425DEL
KC7180 DEL0525 – 0910ALA
Flights operate on Wednesdays, Fridays and Sundays. Operated by Airbus A320, though they shift to Tuesdays, Thursdays and Sundays in Winter schedule
Personally, I have tracked Air Astana for many years and the way they have built their Delhi flights is a case study for Network Planning.
Read: How Air Astana developed the India market?
I was thus expecting the airline to guard itself against IndiGo’s entry and Air Astana has not disappointed with the announcement of these flights.
Air Astana group taking the battle head on
As of this week, Air Astana operates nine flights a week to Delhi from Almaty. The mid-day flights cater to a mix of traffic to Kazakhstan and some traffic beyond to Russia, CIS and parts of Europe. With the addition of FlyAryastan, the Delhi – Almaty sector will see 12 weekly flights by Air Astana group, as compared to IndiGo’s three flights a week. This will grow up to 11 weekly by Air Astana and thrice a week by FlyArystan, a total of 14 weekly flights in Winter Schedule.
This would mean incremental addition of capacity by Air Astana, such that it has 82% frequency share and 80% capacity share on the route. These numbers typically enable pricing power, though on an international route – it is also dependent on feed, point of sale, timings and service.
Various scenarios are played out for immediate, medium and long term strategy. Air Astana has a diverse fleet of A320 / A320neo family aircraft allowing it to adjust capacity and frequency. Likewise, IndiGo, too, has the A320neo and the A321neo which allows an increase in capacity by 46 seats by changing aircraft. But if push comes to shove and Air Astana wants to play the game of frequency over capacity, the airline has the Embraers in its fleet to reduce the capacity but better the timings by offering multiple frequencies.
Taste the same medicine?
IndiGo has long used this strategy of adding capacity when competition is about to begin services on a route. The increased capacity and lowering of prices puts pressure on the competition to sustain, while IndiGo further strengthens its position in the market. If and when, competition bows out, IndiGo can raise fares again and have the market for itself.
A look at the frequency and capacity chart for flights between Delhi and Almaty is a good indicator of how Air Astana is consolidating its presence on the days when IndiGo is operating to put pressure on yields.
| Air Astana Group | IndiGo | Air Astana Group | IndiGo | |
| Flight Count | Flight Count | Seats Deployed | Seats Deployed | |
| 1 | Mon | 166 | ||
| 3 | 1 | Tue | 494 | 186 |
| 1 | Wed | 166 | ||
| 3 | 1 | Thu | 494 | 186 |
| 1 | Fri | 166 | ||
| 2 | 1 | Sat | 314 | 186 |
| 3 | Sun | 494 | ||
| 14 | 3 | Total | 2294 | 558 |
| 82% | 18% | % Split | 80% | 20% |
Is Air Astana trying to give the same medicine which IndiGo is good at giving its competition? Prima facie, it does look so.
Chasing different dreams
The way IndiGo’s timings to Almaty are structured, they would hardly cater to the Origin – Destination crowd of Business and Holiday makers. These are some of the most inconvenient times in terms of landing at an unknown place in the dead of the night. Yet a similar timings has continued for flights to Hanoi and Ho Chi Minh City from Kolkata to cater to connections at India end. With Almaty, not only is IndiGo trying to cater to the feed from India, it also is trying for International to International connections like those to Hong Kong, Singapore, etc which are either lined up or in the process of being lined up.
Air Astana, on the other hand, is relying heavily on the Indian traffic to Kazakhstan and beyond to places in CIS and Russia which do not have easy connectivity and are expensive via the Middle east.
Network Thoughts
Will Air Astana and IndiGo tie-up? Going by the aggression of Air Astana, this looks unlikely. Who will blink first? Will the market grow to accommodate everyone? Both Air Astana and IndiGo have more rights under the Bilateral Air Services Agreement to grow their flights. If IndiGo does come under pressure, will it add capacity with flights on all days, will it sustain the losses for the longer run and build a connection grid around this flight or change timings?
This will be one battle worth following to learn about how the market plays up and how the incumbent defends its turf while a large player tries entering the market. I have been intrigued by IndiGo’s choice of timings. Either the airline is forced to change them or there is a lot to learn for me if there is success and the airline moves beyond being a marginal player on this route, along with that to Tashkent and those to Vietnam – where there are similar timings at play.
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