November 20, 2017
IndiGo could soon challenge Ryanair for global low-cost supremacy Credit: GETTY
It has been a month to forget for IndiGo, India’s biggest airline. It faced criticism on Twitter from one of India’s biggest sporting stars (badminton maestro P. V. Sindhu), a video showing employees manhandling a passenger went viral, prompting liberal use of the hashtag #boycottIndiGo on Twitter, and it was accused of negligence after a passenger fell from her wheelchair while being assisted at Lucknow Airport.
To cap it all off, a flight from Visakhapatnam was delayed for three hours last week after it struck a wild boar during take-off, while a Doha-bound service was forced to make an emergency landing after one of its engines ingested a bird.
Collisions with animals can hardly be blamed on the airline, but the other incidents, which certainly can, have already had a negative impact on the carrier – IndiGo’s share price tumbled from 1,255 rupees on November 3 to 1,166 at the weekend.
IndiWho?
This month’s problems present a rare crisis for an airline that has known very little but roaring success in its short history. IndiGo was founded as recently as 2005, taking to the sky the following year with a service from New Delhi to Imphal via Guwahati. By the end of 2006 it had six aircraft; by the end of 2007 that number was 15. Fast-forward a decade and IndiGo has a fleet of 143 planes and carries 43.5m passengers a year, making it comfortably India’s biggest carrier and the third largest low-cost airline outside of Europe and North America (just behind Air Asia, based in Malaysia, and Lion Air, based in Indonesia). It made $310 million last year, with a total revenue of $2.6bn, and employs more than 12,000 people.
The world’s fastest-growing airline
Such has been the speed of IndiGo’s expansion, it is officially the fastest growing airline on the planet. That’s according to OAG, the industry analyst. Its passenger capacity of 53 million for 2016 represented a 27.5 per cent increase on its capacity of 40.8 million for 2015. A couple of other unfamiliar airlines make the top 10, including Xiamen (+24.5 per cent), Shandong (+14.5 per cent) and Hainan (+14.4 per cent), while Ryanair, the world’s second biggest low-cost carrier, comes ninth (+13.4%).
Is it resting on its laurels? Not a bit of it. On top of that fleet of 143 (nearly all of which are Airbus A320s or Airbus A320neos, with room for 180 passengers) it has a whopping 454 aircraft on order. That includes 380 A320neos (it is already the largest operator of the model, introduced in 2016), 25 A321neos, and 49 smaller ATR 72-600s, which have room for just 74 on board. The ATRs will help IndiGo take advantage of the Indian government's regional connectivity scheme, which will see the creation of up to 100 new airports in remote parts of the country over the next three years.
Ryanair should watch its back
The Irish airline we all love to hate is the second biggest low-cost carrier on Earth. It has 420 aircraft and carried 117 million passengers in 2016. Only Southwest Airlines, the US no-frills outfit that provided the inspiration for Michael O’Leary (“We went to look at Southwest Airlines in the US,” he once said. “It was like the road to Damascus. This was the way to make Ryanair work.”), can trump it.
But give it another 10 years and IndiGo could be challenging them both. Ryanair has “only” 179 planes on its order book, and Southwest has 215, compared with IndiGo’s 454, and the potential for growth in India, a country of 1.324 billion increasingly middle class people, is incalculable.
Who are its rivals?
Another Indian airline is giving IndiGo a run for its money, however: SpiceJet. In December 2014 the low-cost carrier was on the brink of collapse following five consecutive years in the red (culminating in an annual loss of $159m – £122m – for that year), but since then its stock has risen more than 800 per cent, giving it a market value of $1.2 billion (£0.9bn). According to Bloomberg, no airline on the planet is performing so strongly, and earlier this year it announced a huge order for 100 new Boeing jets.
SpiceJet and IndiGo are taking over Indian aviation
So why haven’t I flown with them?
Unless you’ve been to India recently – and only 237,000 Britons, or 0.36 per cent of the UK population, make it there each year – then you won’t have flown with IndiGo. That’s because their route map is almost entirely limited to domestic destinations. You’ll find Dibrugarh, Vadodara, Ranchi, Kozhikode, Indore, Dimapur, Bhubaneswar, Coimbatore, Madurai, Agartala, Bagdogra, and many more rapidly-expanding Indian cities you’ve probably never heard of, but only a handful of international destinations, namely Kathmandu, Muscat, Doha, Singapore, Bangkok, Dubai and Sharjah.
Kathmandu, one of IndiGo's few international routes Credit: Aleksandar Todorovic – Fotolia
That could soon change, however. In July IndiGo, while announcing plans to acquire some of Air India’s operations, claimed it was keen to start long-haul services. “Irrespective of how the Air India story plays out and based on all our internal work, we are generally of the view that it makes fundamental economic sense to enter the international long-haul market,” said Rahul Bhatia, the airline’s co-founder.
It is surely buoyed by the recent success the likes of Norwegian has found in the low-cost long-haul market. Service to Britain could be on the horizon.
Bring on the child-free zones
Would the arrival of IndiGo on UK shores be a good thing? Well it’s not just growing fast; it’s also earning plaudits for its on-board experience. At the annual World Airline Awards in June it was named the best low-cost carrier in Central Asia, and 57th overall (well above Ryanair).
As with most low-cost carriers, food is not included in the airfare. However, both a cabin bag (55 cm x 35 cm x 25 cm) and a piece of check luggage (15kg) is. Take note, O'Leary.
And last year it introduced Quiet Zones, aimed at business travellers, where passengers under the age of 12 are forbidden, prompting gushing praise and parental outrage in equal measure.
Courtesy/Source: Telegraph
