Home / Companies / News /  With stagnant domestic yield, IndiGo bets on West Asia

Mumbai: InterGlobe Aviation-promoted budget carrier IndiGo, which had recently announced the launch of its first daily flight between Amritsar and Dubai from October, is betting big on the Middle East market.

“We believe that the Middle East market still has a lot of potential for us," said IndiGo’s chief commercial officer William Boulter. “And we are expanding our reach within the Gulf to include immediately Abu Dhabi and Kuwait, and then other destinations in the future."

IndiGo, the market leader in India in terms of the number passengers, currently operates 60 daily return flights to the Middle East, including 13 flights to and from Dubai, and eight flights to and from Doha, besides four daily return flights to Sharjah and Muscat. From October, IndiGo will fly 64 return flights to the Middle East daily.

The airline’s Middle East move follows stagnant domestic yield on the back of a falling rupee, increasing fuel price and a competitive market preventing it from raising fares.

About 15% of IndiGo’s total capacity is dedicated to international operations. “A majority of our international capacity is Gulf-based. Roughly about 12% of our total capacity is deployed there (on Middle East routes)," Boulter added.

At present, IndiGo operates a fleet of over 180 aircraft. “We see the Middle East as having some potential for us. It is a natural extension to our domestic flying, using the same aircraft type ."

“We fly with the lowest cost per available seat kilometre, among anyone. So, we are confident that the new flights will be profitable additions to our operations," said Boulter.

IndiGo also plans to start flights to London’s Gatwick airport this winter.

The international market, especially the Middle East, has a much better spread than the domestic market, said an analyst with a foreign brokerage, requesting anonymity. “Also, with the rise in oil prices, Middle East economies are recovering, so airlines like IndiGo will definitely be able to generate good yields in these markets."

“Recently, we were granted some slots at London’s Gatwick airport. So, we will potentially use the slots this winter though we haven’t finalized the plans yet," Boulter said.

IndiGo will fly to London using its Airbus 321 LR aircraft it takes delivery in November.

“We will not be able to go non-stop to London. We will have to make a haul," Boulter added.

Besides Middle East, IndiGo flies to Kathmandu, Singapore, Colombo and Bangkok. Financial Express had earlier this month reported that IndiGo has plans to start flights to Yangon (Myanmar), Istanbul (Turkey), and Riyadh (Saudi Arabia) in the coming months.

IndiGo’s co-founder Rahul Bhatia had during the first quarter earnings call on 30 July said that the airline will also continue to reconnect international destinations to additional cities in India and also open up new destinations internationally.

“With our existing fleet and the new A321neos that is expected to start getting delivered towards the end of this year IndiGo will have the capability to reach to cities in China, Middle East and Southeast Asia," he had said.

IndiGo, which had 41.9% of domestic market share in August, carried 4.75 million passengers during the month.

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