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IndiGo to compete with Air Arabia and flydubai

Carrier wants share of low cost market between India and UAE.
IndiGo president Aditya Ghosh
IndiGo president Aditya Ghosh

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South Asia’s fastest growing airline, IndiGo, will compete with Air Arabia and flydubai in the low cost market between India and the United Arab Emirates from next month, with the launch of its first international route, connecting Dubai to New Delhi.

The service, which commences on 1st September 2011, will be followed by a second route between Dubai and Mumbai one month later, and IndiGo could eventually link the emirate to 15 destinations across India, according to president Aditya Ghosh.

“It’s no coincidence that we selected Dubai as our first international destination. There is a growing community of expatriate Indians that currently reside in the emirate, and they like to visit their home country several times a year, unlike their counterparts in the UK or North America, who normally travel back and forth to India every one or two years,” he told Aviation Business magazine. “Demand is massive, but the market is actually underserved from a low fare perspective.”

Recent statistics have revealed that 1.8 million expatriates from India are currently based in the UAE, while annual trade between the two countries has grown from US$180 million in the 1970s to $43.4 billion last year. To capitalise on the resulting demand for air travel, Sharjah-based Air Arabia offers low cost services to 13 destinations across India, including Mumbai, Bangalore, Delhi, Chennai and Hyderabad. Over at flydubai, budget flights to Ahmedabad will commence at the end of this month, while routes to Lucknow and Hyderabad are already in operation.

“We want to open the market further, rather than take market share from existing carriers,” said Ghosh, while admitting that IndiGo has lost a certain amount of ground due to regulations that India carriers must complete five years of domestic operations before launching international routes. “To a certain degree, that rule has been a handicap for us, creating an advantage for existing carriers that have been flying in this sector for years. Having said that, I would rather look at the positive and over the past five years, we have been able to develop our product offering and hone our skills. There is also a cultural advantage, because everything about IndiGo is geared to understand the culture of Indian travellers. Finally, in comparison to other airlines that operate from the Middle East, we benefit from a much stronger network in India.”

At present, that network consists of 26 destinations and IndiGo is planning to link a growing number of these to Dubai with non-stop flights over the coming months. Services to Trivandrum, Calcutta and Cochin, for example, are expected to start between November and January next year. “We will then look at Lucknow, Jaipur and Patna at a later stage, because there is significant demand there but people have to take connecting flights at the moment. Direct services will be a huge draw and eventually, Dubai could be linked to around 15 destinations by IndiGo,” added Ghosh. Operations will also be launched in other parts of the Middle East, potentially starting with Muscat in October 2011, although media reports suggest the carrier has since lost its traffic rights in the sultanate. Rumours also suggest that Abu Dhabi, Sharjah and Jeddah are being considered. “It depends where the market is developing,” the executive stated. “We are going to keep our options open.”

IndiGo has placed itself in a strong position to compete with existing low-cost carriers on routes between the UAE and India, according to Alistair Rivers, director of industry affairs at Innovata. “IndiGo is already the biggest Indian domestic operator and will now deliver 8% of the capacity between Dubai and Delhi with its daily flight and 6% of capacity on the Mumbai route, creating a solid foundation for future growth in the Middle East low cost market,” he commented.


 

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