Feb . 21, 2024 10:47 Back to list

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IndiGo, India’s muscular airline, will shrink in January and there is little it can do

The airline, which already has over 40 aircraft grounded, is expected to have another 30-40 planes grounded starting next month.

An IndiGo airlines passenger aircraft taxis on the tarmac at Chhatrapati Shivaji International airport in Mumbai (REUTERS) — An IndiGo airlines passenger aircraft taxis on the tarmac at Chhatrapati Shivaji International airport in Mumbai **(REUTERS)**

The operations of IndiGo, the country’s largest carrier by fleet and market share, will possibly shrink this January after several months of relentless expansion. The airline, which already has over 40 aircraft grounded, is expected to have another 30-40 planes grounded starting next month. The impact of that grounding was to be mitigated with the help of wet leases, which are already in operation and dry leases - which are yet to arrive.

The airline has started making changes to its booking engine and as of now, there is a drop of 8% in capacity by ASK between this December and the corresponding Monday post-January 18, when most of the changes are coming live. The analysis was done with data from Cirium, an aviation analytics company, which was shared exclusively for this article. For a single day, the airline is operating 997 unique sectors in December, which drops to 942 for a comparable day in January. As it is an evolving situation, there remains a possibility of further cancellations or rolling back the cancellations leading up to the start of groundings.

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Changes showing up

The Bengaluru-Coimbatore route where IndiGo currently operates thrice daily service with the A320 family aircraft will see five daily flights on the ATR 72-600. While the frequency goes up, the capacity will go down by 29%. The situation is similar between Bengaluru and Mangalore, where currently the airline serves with five daily flights on the A320 family aircraft. This will be replaced by eight daily frequencies with seven of them on the ATR 72-500 and one on the A320.

The schedule listing shows that the airline is also reducing services from key routes. The Ahmedabad-Chennai route sees frequency being dropped to two daily from the current three. The Bengaluru-Kochi route where there has been intense competition in the past is being reduced from the current seven daily flights to five daily flights. The airline is also dropping a frequency between Chennai and Bengaluru, Bengaluru-Patna, Bengaluru-Trivandrum, Kolkata-Hyderabad, Kolkata-Agartala, Kolkata-Lucknow, and Kolkata-Pune amongst other routes.

The airline is also pulling out a lot of routes to North Goa, with flights to Amritsar, Bhubaneshwar, Bhopal, Dehradun, Varanasi, Coimbatore, Dehradun Guwahati, Vizag and Patna being cancelled. Cancellations also include flights between Bengaluru and Dehradun, Kolkata-Amritsar, and Kolkata-Kochi amongst others.

The cancellations are not limited to domestic routes. The airline is pulling out of routes like Bahrain-Kochi, Calicut-Dammam, and Hyderabad-Dammam where rivals are operating and Abu Dhabi-Goa which started recently.

Metros remain unchanged

If the airline is at all forced to scale down its services, it is doing so strategically at places where it can claw back at the earliest. The metro segments have not seen any change. Metro segment is where it will be tied in a duel with the Air India group in future when the consolidation is complete. As expected, the routes under RCS-UDAN have also not been tinkered with.

Various possibilities

The airline could possibly revert on those changes and reinstate capacity if the dry leases enter service. However, when the changes are visible for flights which are five weeks away, there seems a certainty that there will be a drop in capacity - albeit for a short period. It also remains unclear when the grounded aircraft would be back and how long the inspections and replacements would take.

The ATR utilisation will go up and to support the routes, certain secondary routes like Kolhapur-Tirupati are being pulled out.

Opportunity for Tata group?

Air India and its subsidiary Air India Express are slated to add an average of one aircraft every six days. At the end of October, Air India Express stated that it would add 50 aircraft over the next 15 months. Some of these routes have been tried by the Tata group airlines in the past and have not seen success. Will a renewed push see the airline make inroads in what has always been an IndiGo bastion?

Tail Note

The flights are back on sale in the Summer schedule which starts on the last Sunday of March. It remains unclear if the airline is expecting the grounded aircraft back in service or it has a mix of new aircraft joining in and the older aircraft coming in as part of dry leases.

The blip may be temporary for the airline, but will it derail the target the airline has set for itself to cross the 100-million-passenger mark in the current financial year? The airline has been ahead of target thus far but passengers follow capacity and a cut in capacity will impact the passenger numbers. With the largest carrier seeing a small blip, it is likely to impact the overall passenger numbers countrywide. The only solace is that it is a traditionally weaker quarter and will not lead to an astronomical increase in air fares as would have been the case during the festive season.

Who pays for the groundings? The answer could very well be Pratt & Whitney but who pays for the loss of business? The answer again could well be Pratt & Whitney. However, the airline has kept the earnings from groundings out of public purview and refused to share the actual numbers citing confidentiality.

Ameya Joshi is an aviation analyst.

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