Wednesday, December 06, 2017

IndiGo to shift domestic flights from T1 to T2 in Delhi airport? It's up to Delhi High Court to decide

The ongoing fight between market leader IndiGo and Delhi International Airport Limited (DIAL) might be resolved soon as the Delhi High Court weighs the arguments presented by both entities. The exponential growth in passenger traffic over the past three years has led to saturation of airports in key metros such as Delhi and Mumbai.
Delhi's Indira Gandhi international airport (IGIA), which has three terminals (T1, T2 and T3), is expected to cross its total capacity of 62 million passengers a year in the current financial year (2017/18). In the fiscal year 2016/17, the airport handled 57.7 million passengers, adding 9 million more passenger than the previous fiscal year. Even as the DIAL has prepared an elaborate expansion plan to handle the additional traffic, it has failed to convince the airline partners, especially IndiGo and SpiceJet, to cooperate with it to make the expansion possible.
To put things into context, the DIAL wants IndiGo, GoAir and SpiceJet to move a part of their domestic operations from T1 to T2. DIAL plans to increase the capacity of T1 by 2021 - from 20 million a year to 40 million - for which it needs to free up a part of T1. Till a few months ago, T1 was operating at a capacity of 24 million. GoAir, which flies about 4 million passengers to and from IGIA, has recently moved to T2 thereby bringing the capacity back to the threshold of 20 million.
IndiGo is reluctant to move to T2 arguing that it might lead to confusion for its passengers. The airline currently operates from T1 for its domestic operations and T3 for its international operations. By shifting to T2, IndiGo will then have presence at all three terminals of IGIA. The airline wants all of T1 for itself to run its domestic business. SpiceJet, on the other hand, is playing safe and has told DIAL it would move only if the other carriers shift.
The matter is pending before Delhi High Court which has reserved the order after hearing of the arguments. The skirmish between IndiGo and DIAL seems to be more about clash of egos than solving the problem at hand. Both sides have valid arguments. For IndiGo, operating from three terminals would entail logistical and cost challenges. There might be some inconvenience for IndiGo's passengers for a few days, but such issues can be sorted out in the due course.
For IndiGo, having an exclusive terminal will give it bragging rights, and will earn it brownie points in the eyes of frequent fliers. Something akin to Delta Air Lines' exclusive terminal at New York's JFK airport, and Emirates' exclusive terminal at Dubai International airport. It will definitely not go down well with other carriers. Since there are global precedents, DIAL's argument can, therefore, easily be quashed.
05/12/17 Manu Kaushik/Business Today