Saturday, December 29, 2018

IndiGo added one plane a week in 2018, but what next?

On Friday, a plane registered as VT-IUA took off from Hamburg for New Delhi to join the ballooning fleet of IndiGo. This marked the 52nd time IndiGo bumped up its fleet this year. This is also the first of the several A321neos that the airline will fly. IndiGo has 205 planes in its fleet, which comprises 126 A320ceos, 65 A320neos and 14 ATRs, with VT-IUA being the first A321 and 206th plane.

With the newest plane, IndiGo, India’s largest carrier by domestic market share and fleet, has leapfrogged to the sixth position by fleet in Asia. The airline ended the last calendar year with 153 aircraft, which included 32 A320neos and 3 ATR 72-600s.

At an average induction of 1 aircraft per week in 2018, IndiGo is poised to overtake ANA, AirAsia Bhd, and Emirates in size of fleet. AirAsia group, which operates in Malaysia, Thailand, Indonesia, the Philippines and India, has 252 planes, Dubai-based Emirates has 260 and Japanese carrier ANA operates 232 planes.

IndiGo’s fleet size pales in comparison to Chinese carriers, which lead the fleet in Asia. China Southern has 601 aircraft, China Eastern flies 525 planes and Air China has a fleet size of 410.

IndiGo recently converted a sizable order of 125 A320neo planes to A321neos. That takes the total order for the A321neos to 150. Airbus offers the A321neo in multiple variants, including the standard type – A321N, A321NX and the A321neoLR.

IndiGo has opted for the cabin flex configuration offer from Airbus. The new second over-wing exit replaces the second door pair in front of the wings, which has helped increase capacity to 240 seats from 221. IndiGo's first A321 is equipped with 222 seats.

This increase is without any additional crew cost because at least five cabin crew members would be required for either 221 or 240 seats. The manufacturer will also offer the A321neoLR (long range), which aims to have a range in excess of 7000 km with nearly 200 seats.

Following the LR will be the A321XLR, which boasts of a range of 9,300 km. These two sub types will fill up the middle of the market demand, which is hitherto being fulfilled by the Boeing 757 planes and existed primarily in Europe and America but has graduated to Asia as cheaper flights, burgeoning incomes and a large population looks to fly direct to places farther away. The airline has the flexibility to choose the sub-type of the A321neo at a later date since it involves additional AFT (Auxiliary Fuel Tanks) based on the version.

While IndiGo has seen a rapid fleet growth, the destinations it serves are dwarfed by those of its competition. The airline today is operating or has announced flights to 67 destinations, which include 15 international ones. The A321neos could propel IndiGo to the big league in terms of destinations as well.

Preparing for the A321s and subsequent expansion, the airline launched a flight blitzkrieg in 2018, introducing flights to Colombo, Dhaka, Phuket, Male, Kuala Lumpur, Kuwait, Abu Dhabi and Hong Kong. Domestic expansion continued unabated with the launch of new stations such as Allahabad, Surat, Hubli, Rajahmundry, Tirupati, Vijaywada, Jorhat, Tuticorin and Trichy. For an airline that launched less than 50 stations in its 12 years of existence, the 17 new destinations in a single year indicate IndiGo’s renewed ambitions to expand and quickly at that.

However, this kind of expansion comes with its own set of challenges. India is short of talented manpower in the crew department. The regulator has increased the notice period of captains to one year. Though this will help IndiGo as the market leader as it stands to lose fewer pilots to competition, it also stops pilots from competition joining its ranks.
29/12/18 Ameya Joshi/CNBC TV18

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