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Business News/ Companies / With new Airbus order, IndiGo is likely taking a flight to becoming premium
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With new Airbus order, IndiGo is likely taking a flight to becoming premium

India’s largest airline’s decision to buy 30 Airbus A350-900s with options for 70 more could be the first of many steps to shedding its inherent low-cost speciality.

The spread of IndiGo makes it the airline of choice by default beyond the major cities in the country. (Bloomberg)Premium
The spread of IndiGo makes it the airline of choice by default beyond the major cities in the country. (Bloomberg)

IndiGo has “agreed" to buy 30 Airbus A350-900s with options for 70 more. The airline made the announcement and informed the stock exchange on April 25. This marks a new journey for IndiGo as it starts expecting and inducting the widebody aircraft in its fleet from 2027. Currently, it has two B777s in its livery but those are wet-leased from Turkish Airlines. The airline has said that it would look at the cabin features and layout of passenger amenities (LOPA) later.

While low-cost long haul has always been a question of survival and the space seeing not-so-successful airlines in the form of AirAsia X along with failures like Wow Air and Norwegian, things have been changing in the low-cost long haul segment as well as for IndiGo.

Also read: IndiGo co-founder Rakesh Gangwal further reduces stake in InterGlobe Aviation

Dual class?

Most low-cost carriers (LCCs) with widebody have opted for a dual-class configuration. While the front cabin is not a full-fledged Business class, it ranges from the best of Premium economy products to lie-flat seats.

Airbus has provided the option for 10 abreast A350s, which sees the side panels being thinner. However, a 10-abreast configuration sways away from the standard Airbus seat size of 18 inches. French low-cost carrier French Bee operates a mix of A350-900 and A350-1000 and its A350-900s are configured with 35 Premium Economy seats and 376 economy class seats. The airline offers onboard screens for IFE and wi-fi connectivity.

It now looks certain that the airline - which has already made statements about having a loyalty programme in the near future, will also look at dual-class features. With its reach and spread, the incremental revenue could possibly help push up its RASK (Revenue per Available Seat Kilometre) which otherwise would stagnate for lack of anything better on offer once the current high demand phase is over after the engine and capacity issues ease out.

Loyalty

A loyalty programme may be expensive to maintain but for an airline looking to fly across the world with interlines and codeshares, it may be a necessity. In India, LCCs have taken multiple stabs at Loyalty programmes including those by SpiceJet and Go Air - both did not make a large headway into this space, largely because Indians have been more loyal to low cost than loyalty in the form of points.

The spread of IndiGo makes it the airline of choice by default beyond the major cities in the country. The airline has made the most of it by creating multiple hubs beyond Delhi to help offer better one-stop options for passengers.

Streaming, charging and more?

IndiGo is trialling out streaming on its app starting May 1 on the Delhi-Goa route. Will this be the route for future or will the A350s come with personalised screens? IndiGo has been a champion of cutting weight onboard for better fuel efficiency. The screens go totally against the concept but this is long haul and we are possibly talking of flights to Australia, North America and Europe amongst possible options to Africa. What will be the deep discounting needed to attract passengers or will the additional weight be covered up with increased revenues?

Lack of charging points has been a pain point on IndiGo for a long time, especially on long sectors like those to Nairobi, Jakarta or Denpasar Bali. With the widebody, the airline will go longer.

Also read: IndiGo makes long-haul foray, orders 30 wide-body aircraft

Tail note

Will this prompt Air India Group to tweak its plans for its low-cost subsidiary Air India Express and operate it on the lines of Scoot? Over a period of time, if the group feels the pinch of IndiGo’s widebody and needs to deploy capacity in a price-sensitive market, will it convert its older 787-8s for Air India Express?

The airline has moved away from its single fleet philosophy, went from a point-to-point carrier to a hub and spoke model, ventured into multiple fleet types with turboprops, has confirmed plans for a loyalty programme and now agreed to order the widebody. The only thing it hasn't changed is the lack of ovens onboard. Will it finally carry the additional weight of the ovens or are they just too heavy that it believes it can continue running the operations without hot meals? The answer is now closer than ever.

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Published: 26 Apr 2024, 02:50 PM IST
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