Low cost space in India is getting crowded: IndiGo CEO Ronojoy Dutta

NEW DELHI: The CEO of India’s largest low cost carrier (LCC) IndiGo Ronojoy Dutta feels that the low cost space is getting crowded with Rakesh Jhunjhunwala’s Akasa set to make its debut early next year.
On the other hand, he says that the imminent expansion of full service carrier (FSC) space with Tatas acquiring Air India is just what the market needed as “India really has scope for a full service carrier”.
“There will be another LCC (Akasa)…. the field for LCCs will get crowded. There’s IndiGo, SpiceJet, GoAir, Akasa (Tata’s AirAsia India also at present). There will be more competition. That’s how we see it,” Dutta said on Thursday in an earnings call after IndiGo announced its July-September result.
IndiGo accounts for almost 57% of domestic market share currently.
Jhunjhunwala had in a media interaction some months back said some very weak airlines may not survive for too long.
“While we do not know as yet what the Tatas are going to do, all indications are that they will be a full service carrier. They will be focussing a lot on international markets and markets that we don’t even compete in. The Londons, New Yorks.. Having that whole group work in a full service carrier mode will be good for us,” Dutta said.
“There will be some natural separation in the sense we will be a low cost carrier without a business class or premier economy flying narrow bodies on (routes upto) seven hours. They will be a Vistara type model flying wide bodies with business, premier economy (and economy) in a bigger circle of international routes.”
In case Tatas also go in for a low cost and a FSC? “We will have to see how that evolves,” he says.
About Akasa’s ultra LCC (ULCC) dreams he said IndiGo had studied that model “at great length”.
All the features of such a concept — like having maximum number of seats in an aeroplane is something that is already being done by all LCCs here. Monetising all kinds of things, most importantly check-in baggage is something that is not possible as Indian rules say airlines must allow the first 15 kg without any extra charge to domestic passengers.
“Therefore it is very difficult for a new entrant to distinguish itself from IndiGo in terms of having lower costs. Our aircraft ownership costs are among the lowest in them world. Our seats density is the maximum it can be. Baggage rules apply equally to all. So you can brand it as you want but are there are key distinguishing features? We don’t think there are any,” Dutta said.
Tata-AI will expand on ultra long and long haul routes and IndiGo will get into more routes with flying times of upto seven hours.
“A lot of (foreign) airlines carry traffic to and from India one-stop via their hubs like Bangkok, Singapore, Dubai, Abu Dhabi and Doha. Now we have an opportunity to carry this nonstop, whether the Tatas do it or IndiGo does it. This is a great revenue opportunity for Indian carriers,” Dutta said.
The pandemic has seen a shift to nonstops with north American carriers like United, American Airlines, Air Canada starting direct on more India routes. That will further impact the one-stop India transit model which all middle eastern carriers have used for years.

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