IndiGo was supposed to have been the second airline to receive the Airbus A320 neo. Despite the delay, IndiGo will still be the first Indian airline to receive the A320 neos, followed by Go Air. Deliveries to IndiGo are likely to happen in the summer of this year. Lufthansa, the first customer of the variant, is already operating the neo albeit short routes within Germany, between Frankfurt, Hamburg, Munich and Berlin.
Seat maps published by Lufthansa allow one to compare the A320’s cabin with the A320 neo’s cabin. Both cabins are of identical length, but have a key difference in the layout: The aft two lavatories are moved to the rear bulkhead, reducing galley space, and making space for one extra row of seats (see the image on top). Lufthansa’s A320ceos has 168 seats in its cabin (across 2 classes), while the A320 neo with the rearranged ‘SpaceFlex’ cabin fits 180 seats (across 2 classes), as shown below.
In the case of IndiGo and GoAir’s A320 neos, the cabin will be fitted with 186 seats (single class), 6 more than the present 180 seats fit in the cabin. Moving the lavatories towards the rear bulkhead, and eating into the galley space makes sense for low cost carriers, as the quantum of uplifted food is lesser than full service carriers. But the last row will be where the lavatories were earlier located.
The issue is not about sitting where the lavatories once were, but that the last row (which will be identified as row 31 on IndiGo and GoAir, and row 32 on all other airlines that skip the number ’13’ when identifying rows) will have no window, and little to no recline. This will, undoubtedly, become the least preferred row on the entire aircraft. To make things a bit more uncomfortable, the walls start moving inwards at that row, part of the taper of the aft fuselage.
Seat pitch on the 186 seat A320s will remain unaffected at 28/29 inches. But remember to keep an eye out for windowless row 31 and above.
Today, India, for the size that it is, has only four airlines that fly international: Full service carriers (FSCs) Air India and its subsidiaries, and Jet Airways, and Low cost carriers (LCCs) SpiceJet and IndiGo. This is in contrast to the 10 airlines that operate domestic scheduled services in India, today. While Indian carriers flew 81 million domestic passengers in calendar year 2015 (CY2015), Indian carriers flew only 18 million passengers in the same period.
Only two airlines/airline groups operate short, medium and long haul international services: Air India and Jet Airways. Both airlines have diverse fleets: from short haul domestic ATR 72 turboprops to long haul international Boeing 777s. The LCCs in contrast have narrowbody jets that can cater only to short haul international services.
Due to the limitations of fleet and perhaps the lack of commercially attractive international destinations, LCCs IndiGo and SpiceJet deployed only 4.8% and 9.5% of their total flights on international, in CY2015. In contrast, Jet Airways (Including operations from the Jetlite AOP) deployed 22.1%, while Air India (Including Air India Express and Air India Regional (Alliance)) deployed 32.7% of its total flights on international. Air India and Jet Airways together contribute to 84.5% of all international departures by Indian carriers, while IndiGo and SpiceJet contribute to just 8.8% and 6.8% respectively.
This statistic shows IndiGo and SpiceJet are very small players in the international front, serving destinations at neighbouring countries. IndiGo operates only to five international destinations: Kathmandu (Nepal), Muscat (Oman), Singapore (Singapore), Bangkok (Thailand), and Dubai (U.A.E.), while SpiceJet operates only to six international destinations: Bangkok (Thailand), Colombo (Sri Lanka), Dubai (U.A.E), Kabul (Afghanistan), Male (Maldives), and Muscat (Oman).
Air India and Jet Airways started operations before the 5/20 rule was instated in the year 2005. IndiGo and SpiceJet started operations after the 5/20 rule was introduced. The 5/20 rule requires airlines to operate domestic services for a minimum period of five years, after which it can fly international only if the airline has a fleet size of 20 or greater.
Air India Express was the only airline to start immediate international operations (although on an AOP different from Air India) after the 5/20 rule was introduced. The first flight of the airline was an international flight.
Neither IndiGo nor SpiceJet fought the 5/20 rule at that time as the focus of both airlines then, as it is today, is to tap the potential of the domestic market. SpiceJet started international operations in October 2010, while IndiGo commenced international operations in September 2011. Despite both LCCs having started international operations nearly five years ago, when the scale of domestic operations were smaller, both airlines chose not to focus on international operations. (See IndiGo’s fleet induction, here) Both airlines always had the option of inducting larger aircraft to serve destinations beyond the surrounding Asian and Middle East countries. But such is not their business model.
As a result, the only Indian carriers to majorly serve international are Air India and Jet Airways, both of which were not ‘victims’ of the 5/20 rule, whereas IndiGo and SpiceJet, which chose to focus on domestic even though they started international operations five years ago, are ‘victims’ of the 5/20 rule, strongly opposing the removal of the a rule that means nothing, and does not impact either airline..
Go Air started operations in the year 2005, but chose not to increase its fleet beyond 19 aircraft. It deferred its 20th aircraft, which was readied by Airbus. As a result, the airline does not fly international, and seems to have no issues remaining a domestic player. Yet, the airline opposes the removal of the 5/20 rule, though it chose not to operate international.
In the quarter ending 31st December 2015, a total of 12.6 million international passengers were carried by both Indian and international airlines. Of that number, Indian carriers flew just 4.5 million passengers, or just 36% of the total traffic.
India is underutilising its bilaterals, due to restrictions placed by rules such as the 5/20. For the purpose of this case, and for want of time, we consider only three international destinations: Singapore, Bangkok, and Kuala Lumpur.
As of late February 2016, there are three airlines from Singapore that operate to 13 destinations in India. Singapore Airlines, Tiger Airways and Silk Air together operate 134 flights per week to India, from Singapore, and an equal number of return flights. Together, the airlines deploy 30,517 seats per week between Singapore and India, in each direction, using a variety of aircraft: Airbus A319s, A320s, Boeing 737-800s, Airbus A330s, Boeing 777-200s, 777-300s, and Airbus A380.
In contrast, three Indian airlines (four if you count Air India Express separately) connect Singapore to only four destinations in India. Air India, Air India Express, Jet Airways and IndiGo together operate 63 flights per week between the two countries. Together, the airlines deploy just 13,244 seats per week between Singapore and India, in each direction, using Airbus A320s, Boeing 737-800s, Airbus A330-300s, and Boeing 787-8s.
Thai Airways, Thai AirAsia, and Bangkok Airways operate from Bangkok to eight destinations in India, flying 73 flights and deploying 19,497 seats per week, Using Airbus A320s, Boeing 747s, 777-200s, 777-300s, Airbus A330-300s, and Boeing 787-8s.
In contrast, SpiceJet, IndiGo, Jet Airways and Air India together operate 62 flights, deploying 12,474 seats per week, from four Indian destinations to Bangkok, using Airbus A320s, Boeing 737-800s, 737-900s, and Boeing 787-8s.
From Kuala Lumpur, AirAsia Berhad, AirAsia X, Malindo, and Malaysian Airlines operate 180 flights to 12 Indian destinations, deploying 32,903 seats per week between Malaysia and India, using Airbus A320s, Boeing 737-800s, 737-900s, and Airbus A330-300s.
In contrast, only Air India Express operates to Kuala Lumpur, connecting only Chennai to the Malaysian capital with 4 weekly flights and deploying 744 seats per week.
While not all destinations are commercially viable, there is a huge mismatch between the capacity deployed by foreign carriers, and the capacity deployed by Indian carriers, on the same set of routes. Infact, the superior connectivity offered by foreign carriers is not matched by Indian carriers, leaving a large scope for more Indian carriers to boost the Indian economy while also providing international passengers seamless domestic connectivity.
The 5/20 rule must go if India should see it’s own airlines connect India with the rest of the world.
What the FIA won’t tell you
The Federation of Indian Airlines (FIA), have something against the airlines of the Father of Indian Aviation (FIA), Late JRD Tata. The Tata’s have already done enough to promote connectivity within India: TATA airlines was renamed Air India.
The FIA (Federation) is shaken by the prospects of airlines such as Vistara and AirAsia India. The goal of the FIA is to restrict the operations of such airlines to within India, so that players like the market leader can use its low cost base to lower fares on every route such airlines fly, and bleed the airlines dry. Starting with the smallest and the least capitalised airlines, airlines will knock off the Indian scene, one by one, leaving only a few to operate in India, with the market player enjoying a huge monopoly in setting fares. At that point in time, India will suffer, with neither good international connectivity, nor with strong domestic competition nor worthy alternatives.
While the FIA blames consultancy firm KPMG of auditing Singapore Airlines and consulting for the government, it remains silent on consultancy firm CAPA.
CAPA India, in its Aviation Outlook 2016, stated, “Despite repeated statements by the Minister that there is no logic to the 5/20 rule and that it should be abolished, the discriminatory regulation still remains in place”.
Guess which consultancy firm’s services was sought for IndiGo’s Red Herring Prospectus? CAPA India.
The Airbus A320 is the first aircraft to be certified with the Pratt and Whitney (PW) Geared Turbofan (GTF) Engines. The GTF engines are revolutionary, moving somewhat closer to a turboprop with the presence of the reduction gear-drive. The A320neo (new engine option) variant with the PW 1127G-JM engines, the A320-271N, has run into a spot of bother, which has made Qatar and IndiGo refuse the aircraft with its present restrictions. Lufthansa is now the launch customer of the neo.
According to Air Transport World (ATW), “…operational restrictions are still in place for the Pratt & Whitney PW1100G engine, pending some hardware and software changes”. This restriction requires the engines to idle for three minutes before the aircraft can commence taxi. Qatar will not accept a part-baked product, and IndiGo will not operate an airplane that will mess with its strict turn-around schedule.
The 5th production Airbus A320neo (-271), MSN 6801, is slated for Lufthansa, to be registered D-AINA. The 11th production A320-271N, MSN 6864, to be registered D-AINB, is the second A320neo slated for Lufthansa. The remaining A320neos upto the 11th are slated for Indigo (5), Qatar (2), and Spirit Airlines (1). Both are assembled at the line at Hamburg (Germany). The first A320neo is planned by Lufthansa to be introduced into commercial service in January first week, according to ATW.
With Lufthansa stepping up as the launch customer, Qatar will become the second operator to induct the A320neo, and IndiGo the third. Go air is slated to receive the 23rd production A320neo (-271N). IndiGo will then receive its neos only in early 2016, as had originally been widely speculated, based on other issues the engine had earlier faced.
The Pratt and Whitney GTF engine, by virtue of its new technology, will have its share of issues till the engine matures, as is the case with almost every new engine. While the GTF optimises propulsive efficiency through the use of a reduction gearbox to drive the three stages of the engine at optimal speeds, the alternate engine to power the A320neo, CFM’s LEAP-1A, optimises thermal efficiency by running the combustion chamber much hotter, relying heavily on material technology to withstand such temperatures. According to Aspire Aviation, the CFM engines have underperformed on fuel consumption, and is facing issues related to both component heating, and cooling mechanisms.
While IndiGo and Go Air will bear the brunt of the bound-to-happen hiccups as the engine matures, Vistara, which is yet to make a decision on its engines in the first half of 2016, will receive its leased neos only in the second half of 2017. The airline will have good time to keep a close watch on the PW1127G-JM engine performance and reliability to make a better informed decision. While the aircraft and engine certification programme put the aircraft through extreme tests, it is also a known fact that Indian operating conditions are harsh for engines. Prolonged operations in Indian conditions will truly test the A320-271N.
Air India has apparently not yet decided on leasing neos in the short-medium term.
There are few airlines in India which talk about their employees on social media. IndiGo has been featuring some of its staff and crew in its in-flight magazine, but these are more individual stories – either of struggle or achievement than a general feature. AirAsia India hasn’t officially talked of its staff – most photos of staff in a joyful mood are clicked and posted by its poster CEO Mittu. Air India only recently got active on social media. Go Air remains silent and Jet Airways uses certain employee photos to focus on matters other than the employees.
SpiceJet stands out. It became the only airline in India to sticker photos of its crew on the sides of its poster aircraft – VT-SZK. It did away with models, and featured employees for all promotional advertisements and banners. SpiceJet uses its employees as faces of the airline. Women’s day had to be special
Of all airlines in India, SpiceJet and Air Costa were the only ones to issue press releases with photos of their all women crew. While SpiceJet talked of 16 all women flights operated on Women’s day, Air Costa operated four flights with an all women crew. Air India operated four such flights, but spoke nothing of it on its social media sites. Air Costa issued a press release, but it was only the chief financial officer (CFO) Vivek who posted photos of the all women crew. The only airline that well coordinated the effort was SpiceJet.
Sanjiv Kapoor, the COO, was active on Twitter, and posted a photo of him posing with the all women crew who flew him from Goa to Delhi. The airline allowed all its fans and followers on Twitter to ask four of its women crew – a captain, a first officer, a cabin crew in charge, and a cabin crew, questions about pretty much anything. It also posted photos of the all women crew that operate the first Q400 and Boeing 737 flights today. SpiceJet pulled all plugs to engage with its audience, and the crew interaction was perhaps the most meaningful activity hitherto undertaken by any airline in India, on Women’s day. The message was clear – don’t just admire, ask and learn. SpiceJet may have been successful in not just inspiring, but guiding men and women seeking a career in the airline industry. Efforts of the management head and the airline social media team seem to have been energetic, and well co-ordinated. Sunday wasn’t an excuse.
While SpiceJet conducted a great, out-of-the-box and meaningful exercise on social media , one aspect where it perhaps fumbled was in blindly (though unofficially) promoting a poorly researched story about a SpiceJet woman pilot from a particular religious community that was carried in the mainstream media – Hindustan Times.
Social media take away – Do what SpiceJet did (not necessarily follow, but get inspired!). It was brilliant and out of the box. Also make social media mental checklists a habit, so that certain stories, when promoted, don’t damage the image of an individual or an airline.
Kudos to SpiceJet, for what it did. We’ll next have to convince them to form an ‘Aviation Day’ that we can observe and celebrate.
When GoAir announced yesterday its intention to offer 17 lakh (1.7 Million) seats for sale for the travel period between Jan 01, 2015 and March 31st 2015, there was something misleading, yet not dishonest about the advertisement.
The advertisement, ‘Winter Offer – 17,00,000 air tickets for travel from January 1 to March 31, 2015 – Fares Rs. 1,469* onwards. Book now!‘, projected the offer as a large volume sale, perhaps on the lines of SpiceJet’s, during the latter’s better days.
The result? The ‘Winter Offer’ attracted many visitors to its website, making the website slow, unresponsive, and at times – not load at all. But the attention it gathered was based on perhaps a misleading wording of the offer.
Go Air is a small sized, Airbus A320 operator. Each aircraft flies just 176 seats, as four middle seats in the first two rows are left vacant as part of the Go Business offering. This airline flies to 22 destinations, on mostly mature routes which the airline claims are ‘profitable’ (in reality, profitable for the capacity of the aircraft). On average, the airline flies 128 flights a day – all domestic – and carries some 20,000 passengers a day. 20,000 passengers translate to 18 lakh (1.8 Million) passengers across three months.
On a lean season to lean season basis, GoAir’s capacity has grown 15%. Based on this, this year’s Q4 FY2014-15 : January, February & March – the period of travel for the ‘Winter Offer’ – may fly close to 21 lakh (2.1 Million) seats, of which 5.8lakh (0.58 Million) seats are expected to fly empty in the absence of a market stimulation.
In short, GoAir offers a sale of ‘17,00,000 air tickets ‘ when the airline can fly a maximum of only 21,00,000 seats, making the number of tickets up for grabs 81% of the expected capacity to be deployed, while only 5,80,000 seats (27% of the expected capacity to be deployed) are expected to fly empty in the Q4 lean season. It’s these empty seats that an airline usually tries to fill via an offer or discount.
The real, discount offers may be available for a maximum of around 5,80,000 seats, while the remaining seats may sell at close to the regular fares, as it still falls under the bracket of ‘Fares Rs. 1,469* onwards‘.
We expect only about 35-40% of the 17 lakh seats to sell abnormally fast in this offer period, as these may represent seats that are priced lower than regular fares. The balance 60% may not witness an abnormal purchase rate, and a large portion may remain unpicked. In the event that the 35-40% target is not met, the airline may perhaps come out with another offer to sell excess inventory in advance. In this sale, the airline has withheld ~20% of its capacity (4 lakh seats), which correspond to about 35 seats a flight, which may include both pre-sold seats as well as seats which may be bought in the last one to two weeks of travel, at high prices. Of these, 8 seats per flight are Go Business, which are priced at between 1.5 – 3 times the regular fares.
The five day sale window is abnormally close to the travel period which starts as soon as six days later – a debatable decision.
GoAir chief executive Giorgio De Roni told PTI ,”The January-March quarter is traditionally a lean quarter… The purpose of introducing these fares is to make air travel affordable during the period”. That statement has proved to be very interesting, considering that in the lean season airfares are usually lower, as capacity is higher than demand. The only time airfares rise is when carriers sell their excess inventory early, thereby not putting any pressure on the pricing as the date of travel approaches.
The best way to read the offer is by separating, “17,00,000 air tickets for travel from January 1 to March 31, 2015” and “Fares Rs. 1,469* onwards. Book now!”.