IndiGo has for now stalled its co-founder Rakesh Gangwal’s ambitious plans to fly low cost long haul flights to Europe, as costs mount and margins are squeezed, said two people in the know.
“There will be no flights to European destinations in the next six months or even a year. I wouldn’t call it a reversal but plans are always reviewed,” said one of the people cited above.
He added the regulatory approvals haven’t been all received for flights to London, the first destination in the west that IndiGo was planning to fly to in the ongoing winters. It had got slots at the city’s Gatwick airport. Those slots will lapse by March.
IndiGo posted its first reported net loss in the July-September quarter. It will shortly announce earnings for October-December.
The halt in plans is also the result of a debate within the management on whether its planned no-frills model for the flights would garner enough demand in a market which is full of highly competitive premium products from carriers such as Emirates and Singapore Airlines, said one of the persons cited above.
IndiGo operates about 55 daily flights or 15% of its total capacity overseas.
“…our internal work shows that IndiGo is a natural player to take advantage of the significant and lucrative international market opportunity that India offers. Specifically, because of our large domestic network, we are well positioned to capture this massive and growing international traffic. It is about time that IndiGo enters the long-haul, international markets and takes advantage of this lucrative opportunity,” Gangwal had said, explaining in part, the carrier’s intentions to buy a stake in state-run Air India to take advantage of its international airport slots and flying rights.
18/01/19 Anirban Chowdhury/Economic Times
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“There will be no flights to European destinations in the next six months or even a year. I wouldn’t call it a reversal but plans are always reviewed,” said one of the people cited above.
He added the regulatory approvals haven’t been all received for flights to London, the first destination in the west that IndiGo was planning to fly to in the ongoing winters. It had got slots at the city’s Gatwick airport. Those slots will lapse by March.
IndiGo posted its first reported net loss in the July-September quarter. It will shortly announce earnings for October-December.
The halt in plans is also the result of a debate within the management on whether its planned no-frills model for the flights would garner enough demand in a market which is full of highly competitive premium products from carriers such as Emirates and Singapore Airlines, said one of the persons cited above.
IndiGo operates about 55 daily flights or 15% of its total capacity overseas.
“…our internal work shows that IndiGo is a natural player to take advantage of the significant and lucrative international market opportunity that India offers. Specifically, because of our large domestic network, we are well positioned to capture this massive and growing international traffic. It is about time that IndiGo enters the long-haul, international markets and takes advantage of this lucrative opportunity,” Gangwal had said, explaining in part, the carrier’s intentions to buy a stake in state-run Air India to take advantage of its international airport slots and flying rights.
18/01/19 Anirban Chowdhury/Economic Times
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