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Commencing operations in 2006, IndiGo is a low-cost carrier based in Gurgaon, India. The carrier, which is owned by Rahul Bhatia’s InterGlobe Enterprises, operates an extensive domestic network and international services to Bangkok, Dubai, Kathmandu, Muscat and Singapore.
Location of IndiGo main hub (Delhi Indira Gandhi International Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider IndiGo fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
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Star Alliance considers new platform for low-cost airlines, targeting Brazil's Azul & India's IndiGo
The Star Alliance is looking at following SkyTeam in offering a partnership platform for low-cost and hybrid carriers. Star sees the new platform, which would fall short of full membership but provide a model for selected LCCs to work with members, improving coverage in key markets.
Star has started to court Brazilian LCC Azul and Indian LCC IndiGo to join the potential programme, which would facilitate connections with participating Star members. Star has been trying to find a solution for India since 2011, when efforts to bring in Air India as a planned new member were suspended, while earlier this year Brazil’s largest carrier, TAM, began the process of transitioning from Star to oneworld.
But Star’s plan for a hybrid and LCC platform is controversial. Some Star members are against the concept of bringing in LCCs, fearing it could water down the alliance’s offering. Star’s pursuit of Azul is particularly controversial as at the same time the alliance has begun working at bringing in full-service carrier Avianca Brazil.
This is the last of a four-part series of extracts from the annual India Aviation Outlook Report for FY2013/14, to be published on 6-Jun-2013.
In this final extract we review the financial and operational performance of Indian carriers in FY2013 and look ahead at their prospects in this new financial year.
The first extract looked at the changing dynamics of the airline sector on both domestic and international routes, while the second examined the policy vacuum that persists in India and the impact this has on the viability and development of the sector. The third part addressed key issues in airport and airspace infrastructure.
The Singapore-India market is poised for a modest increase in capacity, driven by further expansion from the Singapore Airlines (SIA) Group made possible by the recent signing of an expanded bilateral between the two countries.
The updated air services agreement only increases the previous capacity allotment for Singapore-based carriers by 10%. But SIA will take whatever it can get as Singapore-India is an important and generally under-served market. Incremental increases are typical with the India-Singapore bilateral, which has been updated several times in recent years, although Singapore would prefer a much bigger and broader agreement.
SIA along with full-service subsidiary SilkAir and low-cost carrier affiliate Tiger Airways already account for over 70% of capacity between India and Singapore. Indian carriers do not require a revised bilateral as they were using less than 40% of the prior allotment. Indian carriers over the last year have seen their share of the market decrease and may see their share drop further by the end of 2013 as the SIA Group again boosts capacity to India.
United ends 2012 as world's biggest airline, Emirates third. Turkish and Lion Air the biggest movers
United Airlines, following its merger with Continental, has ended 2012 as the world's biggest airline measured by available seat kilometres for the current week, ahead of second placed Delta, whose capacity fell 0.3% year on year, according to Innovata. Fast growing Dubai-based carrier Emirates is the world's third biggest airline by this measure, and could be in second place by the end of 2013 if the past year's growth rates are maintained.
Southwest Airlines remains easily the largest LCC, while Lion Air and Jetstar have each climbed the LCC top 10, to sixth and seventh places respectively, overtaking Westjet. Atlanta Airport (just) remains the world's largest, ahead of Beijing Capital Airport, in terms of seat throughput for the week, but this ranking seems certain to reverse in 2013.
The biggest movers in the overall World Top 50 list include Turkish Airlines, which jumped seven places to rank 15th globally, while Indonesian carrier Lion Air vaulted eight places to enter the global Top 40 for the first time. Iberia and India's Jet Airways fell four and seven places in the 2012 rankings, respectively.
Global Airline Alliances collectively grew capacity at higher than the world rate, with SkyTeam expanding fastest of the three majors, although Star Alliance remains easily the largest.
In the past year, the global marketing alliances – oneworld, SkyTeam and Star – have found themselves facing two large dilemmas. First, almost all of the world's major airlines have become aligned to a global alliance, making it difficult to increase value. The standouts are largely low-cost carriers and Middle East network carriers. Second, internal segmentation has occurred as member carriers, under pressure to be smarter and more strategic, form tight relationships outside of alliance lines. That inverts the loyalty proposition: where carriers once associated themselves with a marketing alliance, now the primary association is often to key members, with the alliance alignment secondary.
SkyTeam's solution is consideration of a hybrid partnership platform. Details are being worked through but the framework would target the low-cost and hybrid carriers that largely comprise the unaligned standout carriers.
Emirates is close to overtaking American Airlines and becoming the third largest airline by available seat kilometres (ASKs) after the Dubai-based carrier's massive 19% increase in capacity over the last year. Emirates' current capacity is close to 30% above levels of just two years ago, according to Innovata. Over the same period, American has cut capacity by about 8% while larger rivals United Airlines and Delta Air Lines have slashed ASKs by over 16%, according to Innovata. Interestingly, were American Airlines to combine with US Airways it would become the world's biggest airline - some 4% larger than Delta by ASKs based on Innovata capacity figures for Aug-2012.
The other big movers over the past two years include Ryanair, which has leapfrogged China Southern and US Airways into the Top 10, and Turkish Airlines, which has soared into 17th position (from 27th two summers ago) thanks to an astonishing 52% increase in ASKs. easyJet has also moved up several places to be just outside the Top 20, while Japan's ANA and JAL have fallen outside the top 20 grouping.
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