Sunday, December 29, 2019

Qatar Airways-IndiGo Codeshare For India: Strategically Excellent, Financially Uncertain

Qatar Airways is narrowing the gap with rival Emirates, which two years ago was 85% larger than Qatar. Last year Emirates was 69% bigger. But Qatar’s growth has been lopsided, especially in India, whose 1.3 billion people, dysfunctional flag carrier, and close proximity to the Gulf should empower Middle East hubs. Emirates is successful: it flies five times a day to Mumbai, India’s largest city, and sells a sixth flight from sister flydubai. Emirates even uses the A380. Qatar? It has just one flight a day to Mumbai.

 The difference is in traffic rights. While Dubai and Abu Dhabi have received additional traffic rights this decade, Qatar’s entitlement is unchanged since 2009. Not only has Qatar fallen behind on growth, it has become imbalanced trying to amass a position similar to Emirates in Europe and North America but without the connections to India.

Unable to grow in India on its own, Qatar has formed a codeshare partnership with IndiGo, the largest airline in India. Unlike many codeshares that are over-hyped, the Qatar-IndiGo partnership gives both a new growth platform, which if scaled could be more significant than they acknowledge. Their challenge is finding a suitable financial framework.

 The initial partnership is one-sided with Qatar codesharing on IndiGo flights between Doha and three Indian cities: Mumbai, Delhi, and Hyderabad. Before the codeshare, Qatar could feed its global network with only its single Mumbai flight. Now it can sell IndiGo’s double daily Mumbai-Doha flights, letting Qatar fill more connecting flights from Doha to London, New York and more.
29/12/19 Will Horton/Forbes
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