IndiGo, India’s largest airline by domestic market share, today accepted its first Airbus A320neo at Toulouse, France. The aircraft, serial number (MSN) 6799, and registered VT-ITC will be the world’s first Airbus A320neo to enter service outside Germany. IndiGo is the second airline to accept the A320neo after Lufthansa.
The A320-271N is powered by two Pratt & Whitney PW1127G-JM engines. Technical issues with the engines had delayed the delivery of these aircraft. At this stage, it is not clear if either the issues have been fully resolved, or IndiGo has benefitted from some sort of compensation from either Airbus or the engine maker Pratt & Whitey. The aircraft is expected to commence commercial operations on on before 15th March 2016.
The first flight for MSN 6799 was on 15th December 2015, nearly 3 months ago. The aircraft is fitted with 186 seats, six more (one row) than the other 101 A320s in the fleet, today. VT-ITC have 31 rows in the cabin, with no windows on the 31st row.
The geared turbofan (GTF) engines fitted on the A320-271N are expected to be quieter than the IAE V2527-A5 engines that power the current fleet of 101 aircraft. The engines are also expected to be more fuel efficient, delivering over 11% fuel burn advantage over the current engines.
The current engines (with the external casing) has a horizontal diameter of 2 meters. The neo engines, with the casing, have a horizontal diameter of 2.67 meters.
It is learnt that technical crew trained on the A320neo are for now based only at Delhi, Kolkata and Bengaluru. The aircraft will be based at Delhi, and initial routes may include DEL-CCU vv and DEL-BLR vv.
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.
IndiGo performed well in Q3’16, but was it the airline’s best quarter in the fiscal in terms of performance? We dive into the numbers, comparing Q3’16 with three other quarters, while forecasting the airline’s performance in Q4’16 – the current quarter.
Today, Prime Minister Narendra Modi flew into Cochin from Delhi on Indian Air Force One, operated by an Indian Air Force Boeing 737-700 Boeing Business Jet (BBJ) with tail number K5014. The way in which the airplane was flown was interesting, and different from the way in which a similar aircraft operating for a scheduled airline is flown. We compare the way in which the military 737 was flown, with the way in which a commercial 737-800 was flown on the same route.
The 737-700BBJ’s lateral flight path is compared with the lateral flight path of a Boeing 737-800 VT-SZA operated by SpiceJet today on Delhi-Cochin as SG 561. What stands out is that the flight path of the military 737 is curvy, and not straight unlike the SpiceJet 737, strongly indicating that the flight was manually controlled, either by being hand flown throughout or by manual heading inputs to the autopilot. It does point to neither the autopilot’s VOR/LOC function, nor the FMS-controlled lateral navigation being used.
The vertical flight path shows that the Prime Minister’s flight (image on the left shows Him beside the 737 at Cochin) was not optimized for fuel burn. The aircraft climbed to 31,000ft (odd level altitude) when headed in the easterly direction, and as it changed direction over Hyderabad to a westerly direction, the aircraft descended to 30,000ft (even altitude). A BBJ, usually being light, can fly much higher than 31,000ft. The optimum altitude for an airplane gets higher as it gets lighter, and it could have step climbed rather than step-descended over Hyderabad.
The SpiceJet 737, in contrast, flew at 37,000ft till over Hyderabad. By then, the airplane was lighter, having burnt most of the flight’s trip fuel. Over Hyderabad, when turning towards Cochin, it step climbed to 38,000ft – just as one would expect for optimal fuel burn.
A valid argument would be the winds at altitudes that could have impacted the military 737’s decision to fly at a lower altitude. The SpiceJet flight and the military 737 flight were 5 hours apart. However, IndiGo’s VT-IEM operating 6E 289 DEL-COK took off just 28 minutes after the Air Force 737, climbed to 35,000ft and then to 36,000ft over Hyderabad. IndiGo’s aircraft in fact picked up 13 minutes enroute, to land just about 15 minutes after the Air Force 737, clearly showing that winds at higher altitude were not unfavourable.
The intent of this piece isn’t to highlight who flies better, but rather to appreciate some of the differences between air transport flights in the military and in the commercial world. Vastly different priorities may explain the differences in flying. In the airline world though, it is all about minimising costs at every little opportunity.
IndiGo will launch a direct daily flight between Delhi and Trivandrum (Thiruvananthapuram) on 7th January 2016, making it the longest domestic direct daily flight to be presently offered in India, with a block time of 3:15 hours.
6E 533 will fly DEL-TRV effective 7th January 2016, and 6E352 will fly TRV-DEL effective 8th January 2016.
No other operator offers direct flights between the two cities.
The flight will cover a great circle distance of 1201 nautical miles (NM) or 2,224 km.
Presently, the longest direct daily domestic flight in India is between Mumbai and Guwahati, operated only by IndiGo, with a great circle distance of 1,119 NM and a block time of 3:00 hrs from BOM-GAU, and 3:30hrs from GAU-BOM. The 30 minute difference is due to headwinds when flying from Guwahati to Mumbai, which serve as tailwinds when flying from Mumbai to Guwahati.
Thanks to Ameya: The longest domestic flight is Port Blair – Delhi (1,339 NM) operated by Air India regional on their CRJ 700s on Fridays and Sundays.
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.
The PW1100G-JM family of engines uses a revolutionary but not new technology that essentially makes the engine a cross between a turboprop and a pure turbofan. This is the largest geared turbofan produced till date. With this engine, Pratt and Whitney marks its return as a single brand powerplant option for narrowbody mainline jets. Boeing 737-300/400/500/600/700/800/900/MAX-7/8/9 are all powered by CFM engines, while the Airbus A320 family of aircraft are powered by either CFM or the IAE consortium’s engines. Pratt and Whitney is part of the IAE consortium.
The “JM" in PW1127G-JM represents partner companies Japanese Aero Engine Corporation (JAEC) and (Motoren- und Turbinen-Union GmbH) MTU. JAEC holds a 23 percent share in the PW1100G program and is responsible for the fan, low pressure compressor (LPC) and combustor/diffuser. MTU holds an 18 percent share and is responsible for the low pressure turbine (LPT), and jointly with Pratt & Whitney the high pressure compressor (HPC). Pratt & Whitney is responsible for the remainder of the engine and systems integration.
The PW1100G-JM family powers the Airbus A320NEO family (A319NEO, A320NEO, and A321NEO) and is available in 5 thrust variants of 22,000/24,000/27,000/30,000/33,000 lbf (pound-force) per engine. The PW1127G-JM that powers the A320NEO is the 27,000 lbf variant.
The CFM powered A320NEO (A320-251N) will be certified in the coming months.
In India, all operators that have placed direct orders for Airbus A320NEO aircraft have chosen the PW1127G-JM as the power plant of choice. IndiGo has 430 Airbus A320NEOs on order, some of which may be converted to A321NEO orders. Go Air has an order for 72 Airbus A320NEO aircraft. Vistara, which is committed to the lease of 20 Airbus A320 aircraft from Bank of China Aviation (BOC Aviation), will receive 7 Airbus A320NEOs from mid 2017 onwards. However, the engine option has not yet been finalised. AirAsia India, which leases aircraft from AirAsia Berhad, will receive Airbus A320NEOs powered by the CFM LEAP engines.
One of IndiGo’s Airbus A320NEOs, MSN 6720, is one of the three test aircraft, and has been flying since September 25th, 2015. However, the first production aircraft is destined for Qatar Airways, the launch customer. MSN 6744, to be registered VT-ITA, a Hamburg produced A320NEO already painted in airline colors, may be the first A320NEO for IndiGo, despite being produced after the aircraft that was already flying for the certification program.
The three flight test aircraft powered by Pratt & Whitney engines accumulated over 1,070 flight hours over 350 flights. Of these 1,070 flight test hours, 300 were completed with the same aircraft in an airline like environment to ensure operational maturity at entry into service.
The A320-271N is the 9th sub-variant of the A320-200 family, after A320-211/212/214/215/216/231/232/233. The A321-271N is ‘significantly different’ from the original A320 Type certificate via the modification labelled “MOD 161000”. Pratt and Whitney received FAA certification for the PW1100G-JM engine on December 19th, 2014.
The A320-271N’s operating empty weight is around 3 tonnes heavier than the A320-232 which IndiGo flies today. However, the maximum take-off weight of the highest weight variant of the A320-271N is 79 tonnes, which is just 1 tonne higher than the maximum take-off weight of the highest weight variant of the A320-232. The dry weight of each PW1127G-JM engine is 453kg heavier than the IAE V2527-A5 that powers the -232 variant. This implies that the weight of accessories and structural reinforcements total to around 2 tonnes.
The A320-271N promises a fuel saving of upto 11% over the A320-232SL and 15% over the A320-232 (non winglet). Such savings are however realised only on flights of 3000NM and higher.
There is a strong possibility of IndiGo receiving its first Airbus A320NEO by end of this calendar year. As per our information, IndiGo’s A320NEOs will be fitted with 186 seats – six seats more than what it fits every aircraft cabin with, today.
Thanks to Cyril for the heads up on the certification.
IndiGo has turned out to be a consistently aggressive player. The 9 year old airline, which went public when fuel prices were at their lowest and profits at their highest, already flies 98 Airbus A320 current engine option (CEO), and is soon expected to add its 99th airplane. Then, the Airbus A320 new engine option (NEO) starts getting delivered. The magnitude of the airline’s orders, and the airline’s share of the first 35 aircraft to be delivered dwarfs every other airline.
Out of the 98 airplanes that the airline flies, 84 are part of the 100 airplane order that the airline placed in the year 2005. 16 aircraft were returned to the lessor, and those were the only airplanes that had a 6 year lease term. Then, IndiGo did something it had never done before – it started short term dry leasing older, previously operated airplanes, in a desperate attempt to increase capacity. The airline has leased 14 aircraft, most from Tigerair, and is soon expected to induct it’s 15th such airplane, making it the 99th active aircraft in the fleet. All the short term dry leased airplanes that were not part of the airline’s order are registered VT-IDx, with ‘x’ taking values from A to O.
As of October 31st, there are 2,868 disclosed orders for Airbus A320NEO airplanes from airline operators and leasing companies. Out of those 2,868 orders, IndiGo’s totals 430 aircraft – a staggering 15% of that number. This is followed next by the AirAsia, which has 304 NEOs on order.
Although Qatar Airways is the launch customer of the A320NEO, the first production NEO is destined for IndiGo. Out of the first 35 NEOs to be produced, 10 are IndiGo’s, followed next by 6 of Qatar Airways.
Both these point to one thing – that IndiGo is desperate for capacity.
But with the 1st, 2nd, 4th, 6th, 9th, 10th, 12th, 15th, 18th and 19th A320NEOs destined for IndiGo, why would the airline want to lease a 11 year old A320 as its 99th aircraft?
The A320NEO was expected to be certified this November, but there apparently few delays that has forced Airbus to state that Qatar, the launch customer, will receive its A320NEO by end of this year, without publicly stating a date. IndiGo is a good planner, and perhaps the induction of the 99th aircraft as an old airplane points to the airline having some knowledge about delays in the NEO program which may be unacceptable for a carrier that is ever looking to add capacity.
IndiGo will be adding capacity not just with airplanes, but with seats. While the airline has stated its intent to induct Airbus A321NEOs, orders for such airplanes do not yet officially reflect in Airbus’s order book. Another way the airline is adding seats to airplanes is through the Space Flex concept, where the two aft lavatories will be moved into the galley, freeing up enough space to accommodate an additional row of passengers, taking the total to 186 seats per A320 as opposed to the present 180 seats per A320. All A320s can be retrofitted to the new configuration.
Interestingly, IndiGo co-founder Rakesh Gangwal mentioned that that the larger A321NEO will have a longer range, when compared to the A320NEO. He told Livemint, ” We will soon have the (Airbus) A321, with 234 seats. That brings down costs dramatically and allows us to do different things. Also, the range of the A321 is bigger, so with the same product, we can fly on longer routes from India”. It was only in January this year that Airbus formally announced the A320NEOLR, a 97 tonne Airbus A321 with three auxiliary fuel tanks that offers a range of 4000 nautical miles (NM), which is 300 NM more what is advertised for the A320NEO. Airbus claims that the 97 tonne A321NEO has “the longest range of any single aisle airliner available today and tomorrow, making it ideally suited to transatlantic routes and will allow airlines to tap into new long haul markets which were not previously accessible with current single aisle aircraft.”
However, deliveries for the long range A321NEO are expected in second half of 2018, which means IndiGo will have to do with the A320NEO till then.
Aditya Ghosh told AIN that the airline will increase its operating fleet to 111, 134 and 154 aircraft, by the end of March 2016, 2017 and 2018, respectively.
This means that IndiGo will need to induct:
13 A320NEOs by end March 2016, or 4 – 5 airplanes a month assuming deliveries for IndiGo start in January 2016.
23 A320NEOs between March 2016-March 2017, or 2 airplanes a month in FY2016-17.
20 A320NEOs between March 2017-March 2018, or 1-2 airplanes a month in FY2017-18.
This will total to 56 A320NEOs, which will represent 36% of the airline’s fleet by end 2018, in line with what Aditya Ghosh told AIN in October: “We will, within two and a half years, have two-thirds of our fleet with Neos and in five to six years, have an all-Neo fleet”.
With such a plan, all the airplanes presently in IndiGo’s fleet will stay atleast till end March 2018, after which aircraft may be replaced by A320NEOs.
Assuming that IndiGo starts replacing the A320CEOs in its fleet with A320NEOs in its fleet from FY2018-19 to FY 2020-21 (to have an all NEO fleet in 5-6 years), that will involve replacements at an average rate of 2-3 airplanes a month. IndiGo has historically inducted on average 1 airplane a month, but in March 2012 it inducted 3 airplanes in a month. IndiGo will be able to handle 2-3 replacements a month, and perhaps 2 additions each month, taking the induction to a total to 4-5 airplanes a month, perhaps at maximum. At such a rate, the fleet at maximum may rise to around 220 airplanes in FY2021-22. A ball-park figure of 200, if achieved, will translate to IndiGo doubling its fleet in the next 5-6 years, amounting to a net CAGR of 12% – a very reasonable growth rate.
The initial hiccup, however, may still be with the A320NEO program. If IndiGo is to achieve its target of 111 airplanes by end March 2016, and if the NEO certification further pushes back timelines, the airline may have to induct more, previously-operated and old CEO aircraft, though that seems somewhat unlikely.
One of IndiGo’s A320NEOs, a Toulouse assembled frame, which is also the 6th NEO to be built (MSN6720), has been flying since 25th September 2015 to help with the certification program. The second A320NEO (MSN6744), which unlike the other initial NEOs for IndiGo has been assembled at Hamburg, and fully painted in the airline’s colors, but missing engines. It may be that the latter MSN (the Hamburg build) will be delivered first to IndiGo.
Thanks to Ameya for heads-up on the 99th aircraft.
The 5/20 rule – allowing airlines to fly international only after completing 5 years of operation and flying a fleet of a minimum of 20 airplanes, was introduced in the year 2005. The year 2005 was the second boom in Indian civil aviation.
Today, in the year 2015, we sit upon the next boom in Indian aviation. Since later 2013, many airlines have started: Air Costa, AirAsia India, Vistara, Air Pegasus and Trujet. The government, exactly 10 years after introducing the 5/20 rule, is going to either retain it, abolish it, or replace the rule. A rule that, on the outside, was intended to both develop domestic capacity and make sure airline operations stabilize before flying international. The true story revolves around the insecurity full service Kingfisher airlines created for one particular airline. Hence, the rule was introduced just before Kingfisher started operations in May 2005.
Since then, the industry has consolidated: Jet-Sahara, Air India-Indian, Kingfisher-Deccan, and the demise of the merged Kingfisher. What has the 5/20 achieved? It has created only 4 international airlines for the world’s largest democracy. Just 4 airlines.
We invite you to read what the 5/20 has done, what its proposed replacement, the 300/600 can do, and whether we must go in for the third option: No rule at all. Please click here.
DGCA published data pertaining to an airline’s performance, commonly quoted by the media, such as Load Factors and OTP, is unreliable and misleading.
The data errors can only be recognized in single fleet airlines and/or airlines that have only recently started operations. In both cases, simplicity allows for cross verification of data.
Investigation into the data errors was suggested by a senior officer of a full service Indian airline.
The most interesting of all airline performance indicators is load factors. Load factors are often looked upon as indicators of successful commercial operations at an airline.
DGCA publishes certain airline related data based on an ICAO (International Civil Aviation Organisation, a UN body) ATR (Air Transport) ‘FORM A’. This form is filled and submitted by airlines to the DGCA, which the DGCA then uses to report load factors airline wise.
The manner in which the DGCA computes load factors is by dividing Passenger-Kilometers (PK) by Available seat Kilometers (ASK). PK is a product of total passengers flown and the total kilometres flown by the airline in a particular month. ASK is the number of seats on all flights multiplied by the total kilometres flown by the airline in that particular month. Dividing PK by ASK simplifies to the ratio of Passengers Flown by Available Seats, which is the definition of load factor.
Another way of computing load factors is to determine the available seats using data not reported in ICAO ATR FORM A. This is the number of seats on every flight. FORM A mentions the number of departures in a month. In single fleet airlines such as IndiGo, Go Air, AirAsia and Vistara, the number of seats on every aircraft is uniform fleet-wide. This means that every flight on each of the above mentioned airlines flies 180, 180, 180 and 148 seats, respectively.
Multiplying the number of flights by the number of seats per aircraft will result in the number of seats flown in that month. Dividing the number of passengers flown by the number of seats gives us load factors for the month.
The first and second method should result in the same numbers. However, this is not the case. Below is the reported load factors versus the computed load factors for IndiGo since it started operations. The two methods agree with each other till December 2008. From January 2009, when the DGCA changed its format of reporting data, the errors have been present, and have been unacceptably large and inconsistent.
The data shows that, according to computations, domestic load factors at IndiGo never crossed 90%, and that load factors crossed 80% only on 7 occasions in 9 years. Average domestic load factors at the airline, across 9 years, is recomputed as just 71.5%, with the highest at 83.3% in the month of May 2015. Of course, this arguably assumes that the number of departures and the number of passengers reported by the DGCA are correct.
Similarly, AirAsia India’s and Vistara’s load factors are not always representative of the actual load factors. In the case of these two airlines, the error is small. However, every 1% error in load factor corresponds to a monthly revenue of INR 56 lakhs for an airline the size of AirAsia India, and INR 16 crore for an airline the size of IndiGo.
Vistara’s load factors have never crossed 70%.
Below is that of Go air, for 9 months only:
Considering that the data is derived from what airlines have published, it may be that part of the onus for the error rests on airlines. It is difficult to compute the error in load factors of airlines such as SpiceJet, Jet Airways, Air India, and Air Costa.
Faith in our method of computation is based on cross checking certain computed load factors with the information revealed by a senior airline official.
On Time Performance
Airline on time performance is another parameter met with much enthusiasm. For example, for the month of April of 2015, DGCA reported that AirAsia India had an on time performance (OTP) of 100.0%. DGCA mentions the OTP as observed at only four airports: Bengaluru, Hyderabad, Mumbai and Delhi. Back then, AirAsia India was based only out of Bengaluru.
However, Bengaluru International airport, in its On Time Performance (OPT) report for April, clearly mentions AirAsia India’s arrival OTP as 89% and departure OTP as 98%. This averages to 93.5% OTP, which made headlines as 100%. (Click here for an NDTV piece on this)
Similarly, Go Air’s OTP for Bengaluru was reported by the DGCA as 88.9%, while the airport stated that the airline had an arrival OTP of 73% and a departure OTP of 86%. The DGCA’s OTP for Go Air at Bengaluru was impossibly higher than the higher of the two OTP for the airline for that month.
IndiGo’s OTP at Bengaluru was reported as 77.2%, while the airport stated that the airline had an arrival OTP of 73% and a departure OTP of 81%. In this case, the average of the departure and arrival worked out to 77%, which is acceptable.
In the case of SpiceJet, OTP at Bengaluru was reported as 68.2%, while the airport stated that the airline had an arrival OTP of 78% and a departure OTP of 78%. In this case, the reported OTP is lower than the actual OTP of 78%.
Data reported by the DGCA is very informative. The data is used by analysts and major industry bodies for studies, reports, and analysis. However, no matter how good the analysis, junk data in results in junk data out, with misleading facts and figures about the industry and the performance of airlines.
Poor data standards may give airlines a way to falsely drive up their performance figures, which may be for many reasons, such as driving up investor sentiment.
SpiceJet, which is the only low cost/fare airline in India to operate with more than one type of fleet, including Boeing 737-800s, Boeing 737-900s, Bombardier Q400 turboprops, today brought in more fleet diversity through the induction of a wet-leased Airbus A320.
The airline had wet-leased two Airbus A319s in the recent past, one of which (LZ-AOA) is still flying with SpiceJet. The A319 that is still flying for SpiceJet is from BHair (Balkan Holidays), and the Airbus A320 inducted today is also from the same operator. This is perhaps a symbol of confidence in operators in wet-leasing airplanes to SpiceJet, perhaps indicative of a more stable financial situation that allows for on-time payments. Boeing 737 wet leased aircraft that earlier flew for SpiceJet in the summer peak season have also returned for another peak-season term.
The Airbus A320 MSN 2863, registered LZ-BHH, previously flew for IndiGo as VT-INB. VT-INB was the second Airbus A320 to be inducted into IndiGo, and exited the fleet in 2012. Sale-Leaseback contracts at IndiGo were earlier for a period of 6 years, which has since been extended after 16 airplanes, following a sooner-than-needed capacity expansion after the collapse of Kingfisher in 2012.
With two Boeing 737-800s dry leased by SpiceJet in scheduled maintenance, the airline today has an active fleet of 23 mainline jets (Boeing 737-800s, Boeing 737-900s, Airbus A319, Airbus A320) and 13 Bombardier Q400s.
In an interesting observation, IndiGo’s load factors for Q2 FY2014-15 were found to be consistently below the average domestic load factors for the first time in its entire operational history.
The chart above (click to expand) captures IndiGo’s domestic load factors as reported to the DGCA. Plotting this against the average domestic load factors reveals 13 months out of 98 when the load factors of IndiGo have dipped below the average. Most of these below-average loads were in the first seven months of operations at IndiGo. In the last six financial years – the same years when the airline has been reporting profits – this has occurred just thrice. However, in this financial year alone, it has occurred thrice – in Q2 FY’15.
It what appears a challenge of supremacy, SpiceJet’s market stimulation was able to distort usual market dynamics in the lean season. For instance, September, which is historically – from the last three years – the weakest month for domestic travel as indicated through the lowest load factors – has this year matched the load factors as seen in May 2014. While demand still remained low, the market stimulation drive created demand, at the expense of yields but to the benefit of RASK – revenue per available seat kilometer.
While SpiceJet brainchilded and executed this, not every airline could follow its footsteps. IndiGo was unable to match SpiceJet’s market stimulation effects, which positively impacted SpiceJet in Q2, and positively impacted other airlines as well. IndiGo’s load factors also rose in sync with the average domestic load factors, but however, underperformed with below average loads.
Indigo, by following what SpiceJet did, salvaged its September. However, its loads in July and August this year were lower than its loads in the same months the previous year. This performance explains in part the Q2 loss of 100Cr incurred at IndiGo.
In short, market stimulation both surprised and helped the blue airline.
India didn’t seem ready for a taste of South East Asian proven low cost strategy. At the same time, IndiGo is ready to make a killing in the months of November and December, lapping up the excess demand due to SpiceJet’s cancellations and planned temporary capacity reduction.
SpiceJet stimulated the market with great effort, only to hand it on a platter to IndiGo in the peak season.
IndiGo, the airline known to consistently post annual profits, realised a net loss of INR 100Cr in Q2 FY2014-15, covering the months of July, August and September (see footnote). In this period, the airline added a capacity of 15%, compared to Q2’14, but flew 21% more passengers – a total of 5.7 Million.
The airline ended Q2’15 with 10 aircraft more than Q2’14, with the fleet strength standing at 82 as of September 30th 2015. This is an increase of 14% in fleet strength compared to Q2’14. The disproportionately higher increase in capacity compared to fleet increase is explained through a 3% increase in average aircraft utilisation, up to an average of around 11.5hrs in Q2’15.
The increase in passengers in Q2 is partly due to an increase in capacity, and partly due to market stimulation efforts that IndiGo adopted, to keep up with SpiceJet’s initiatives. On April 4th, IndiGo launched fares between INR 1,499 and 2,199 for travel between 1st July 2014 and 30th September 2014. The period of travel was exclusively in Q2’15. This was followed by few other promos, most of which were for travel in September 2015. This resulted in September recording the highest growth in passenger, Year-on-Year, as seen in the graph below.
IndiGo’s capacity increased in the three months of Q2: July, August and September. However, compared to Q2’14, the number of passengers per ASK dropped in July, picked up in August, and shot up in September due to numerous sales that targeted September: historically the weakest month for domestic travel. The airline’s cargo performance recorded a growth in July and September. The increase is partly due to the fact that IndiGo has started carrying mail in addition to freight, since May 2014.
Average flight hours per departure have reduced, indicating on average shorter flights flown by the airline, due to increase in domestic flights. International flights, which comprised 6.6% of all flights in Q2’14, has halved to 3.4% in Q2’15, indicating a strengthening on the domestic front and a reduction on the international front (International flights dropped by almost 40%).
However, a lack of vigour and success in market stimulation may have been responsible for the domestic load factors (LF) of the airline to consistently trail the average domestic load factors (see graph above). It may be possible that since IndiGo responded to sales, especially those by stimulation leader SpiceJet, but didn’t initiate them, the efficacy of the sales drives may have been severely limited (a lot of planning and analysis goes into each sale. Responding to others may rob the respondent the time to perform sufficient due diligence). See the comparison between SpiceJet’s and IndiGo’s load factors, below – IndiGo can do a lot better. This could have had an adverse impact on the airline’s RASK (Revenue per available seat kilometre). We consider only the domestic LF, as International forms just 11% of the airline’s deployed capacity.
Interestingly, Rakesh Gangwal and Sanjiv Kapoor have both earned a Master of Business Administration degree from the Wharton School of Business of the University of Pennsylvania. However, a true low cost airline experience (and proven market stimulation strategy) is brought to the table by SpiceJet CCO Kaneswaran Avili. His experience at AirAsia and Tigerair have resulted in the graph below.
A comparison with SpiceJet
A comparison with SpiceJet becomes inevitable – the two largest low cost carriers with seemingly different strategies today.
Sources within IndiGo reveal that the airline’s CASK (cost per available seat kilometre) is at around INR 3.6. Compared to its next biggest LCC competitor – SpiceJet’s CASK of INR 4.07, this is INR 47 paise lower. IndiGo lost INR 175 for every passenger flown in Q2.
The CASK at IndiGo seems to be INR 3.6, and the RASK for Q2 may hover around INR 3.4-3.5. This may be higher than SpiceJet’s Q2 RASK of INR 3.26, which was impacted by cancellations and clubbing of flights.
Here are two interesting scenarios:
One – where IndiGo could have stimulated the market like SpiceJet. An aggressive market stimulation may have narrowed the loss for IndiGo, or it could have perhaps reported a profit. The airline could have flown fuller airplanes (in the light of its disappointing load factors) and brought in more revenue, resulting in a higher RASK. SpiceJet in 2014-15 is undoubtedly the Indian market leader in stimulation. IndiGo on the other hand didn’t respond too well to this. It will be interesting if this figures in their next year’s strategy.
Two: Where SpiceJet could have had the CASK that IndiGo enjoys. If SpiceJet’s CASK was INR 3.6 against its INR 4.07, its loss would have narrowed to around just INR 120Cr. Despite its high RASK, SpiceJet was able to salvage the situation to a level where the loss was arrested at INR 310Cr.
If IndiGo starts behaving like a true low cost carrier, perhaps emulating, and not merely responding to the kind of market stimulation that SpiceJet was able to execute, it may become an untouchable. The only way for other airlines to survive will be through differentiation: Vistara as full service, with favourable connections to the world through Singapore; Jet as a full service, with favourable connections to the world through the middle least; and SpiceJet through its well differentiated in flight services and Tier II/III connectivity. AirAsia and GoAir may face the highest heat as they yet do not have an offering that IndiGo doesn’t. While AirAsia may have the backing to grow to a scale to take on IndiGo with scale and lower costs, GoAir will be the loner.
Fleet and network expansion
A strategy that IndiGo seems to be applying is market dominance through excess capacity, frequency and network. The airline, however, is yet to make the most of its ‘overcapacity’.
IndiGo received its 100th aircraft on the 3rd of November, 2014, completing an order that was placed in 2005. With this 100th aircraft, the fleet size rose to 84 (16 A320s were sent off as per the old lease contract that lasted six years).
To fill the gap between November and last next year – when its NEOs from its second, 180 aircraft order placed in 2011, are expected to be delivered, IndiGo has ‘short term’ leased around 12 Airbus A320 aircraft used by Tigerair or its now defunct subsidiary at Indonesia – Tigerair Mandala. The first aircraft, a non-sharklet A320 that flew at Indonesia, joined IndiGo’s fleet on 21st November as VT-IDB.
IndiGo today (26th Nov 14) announced Kozikhode as its newest, 37th destination, which will be connected 2nd January onwards. With this, the airline’s daily flight count will rise to 554.
Footnote: Source of loss: Airline internal sources.
IndiGo today received its 100th Airbus A320 from Hamburg, Germany – one of Airbus’s three presently operational assembly lines. The aircraft, bearing manufacturer serial number 6336, and registered as VT-IAY, was ‘delivered’ to IndiGo yesterday (3-Nov), at around 2300HRS IST (1730 UTC). IndiGo flew the aircraft from Hamburg (Germany) to Istanbul (Turkey), and after a brief tech stop (for refuelling), continued to Delhi. The aircraft landed at 0900 HRS IST (033UTC).
This aircraft marks the completion of the first order of airplanes IndiGo had placed with Airbus, on 16th June 2005, during the Paris Airshow. Back then, IndiGo was just a name.
However, even as far back as in 2005, IndiGo had done its homework well. Not many times does Airbus praise a yet-to start airline with words such as, “IndiGo is the result of extensive analysis and planning by very experienced airline executives and we are convinced it will be a successful new player in a market that is both large and fast growing". These words were spoken by the then Airbus President and CEO, Noël Forgeard.
IndiGo today has survived as the only airline in India to consistently report profits over the last six years, and stands to witness the completion of a massive order of aircraft. The airline firmed up an order for 180 Airbus A320s on 22nd June 2011, for 150 A320NEO and 30 A320CEO (current engine option) aircraft, making it one of the NEO’s launch customers. On 15th October 2014, IndiGo signed an MoU for 250 A320NEO aircraft. As covered first by The Flying Engineer, IndiGo will short term lease A320 aircraft from ailing Tiger Airways.
Almost one year after placing an order for 100 aircraft – in June 2005 – IndiGo received its first A320 on 28th July 2006. The airline commenced operations on 04th August 2006 – 11 days before the completion of India’s 59th year of Independence, and just 6 days after receiving its first aircraft.
All the aircraft since day one have been directly delivered to the airline from Airbus. Till date, the airline has not flown an aircraft that was previously used by another operator. The airline has engaged in sale-leaseback deals for each of its aircraft. The early lease agreements were for about six years (see adjacent graph) – a period just long enough to make the most of a brand new, efficient Airbus A320, while escaping the costly ‘D’ check. Lease agreements have been revised this year to extend the lease to 10 years, in view of IndiGo’s plans to aggressively add capacity to take on the Indian market.
Anomalies have existed in the airline’s aircraft lease. Of the 16 aircraft that have been returned, five flew for the airline for a period ranging from as low as three months to 1 year 5 months (see adjacent graph). Three of these aircraft are today being flown by Etihad, the same airline IndiGo is losing a large number of pilots to.
Of the 84 aircraft in operation, almost quarter the fleet size is between two to three years old, and another quarter between two to one year old (see graph). This shows that nearly half the fleet size was inducted in the last two years. Interestingly, it is two years since Kingfisher airlines stopped all operations, and nearly 60% of the fleet – almost 50 aircraft- was inducted since then. IndiGo expanded fast enough to grab the void in the market that Kingfisher left behind, to today command the largest domestic market share, which is upwards of 30%.
On average, every 35th Airbus A320 produced since 2006 has been delivered to IndiGo. On average, the airline has received one Airbus A320 every month.
Interestingly, though, the airline, for 120 days – between 1st April 2014 and 30th July 2014 – did not receive any aircraft (see graph above – red arrow). It is the longest gap between aircraft deliveries in the history of the airline. The yearly frequency of aircraft joining the airline has not been consistent. (See adjacent graph).
The graphs also show that the 6 year lease, which was in effect earlier, has been extended since early this year.
IndiGo had to adopt five different registration series to cater to its 100 aircraft. Of these five series, only three – the IN, IE, and IF series have had all the English alphabets as the third letter.
All 16 aircraft that have left IndiGo’s fleet were from the IN series. Sharklet equipped A320 aircraft at IndiGo started in the IF series, with VT-IFH. VT-IFH was the first shraklet equipped A320 in India.
With Airbus’s continuous improvement to the A320, every series has something unique, with some changes that may not be noticeable from the outside. For example, VT-IAP onwards, all A320s have a smooth nose, with the lightning strips now embedded in the nose cone (see image comparison below). This helps reduce aerodynamic drag.
With 30 Airbus A320CEOs still in the order book, IndiGo may sustain the induction of 1 A320 a month for the next 2.5 years atleast. Tigerair’s 12 A320s may be used to boost capacity till such time IndiGo’s target fleet size with its own aircraft is reached. With Airbus’s initial A320NEO production rate set to be slow, deliveries of a mixture of A320CEOs and A320NEOs may start late next year, with mixed deliveries running perhaps into 1.5 years, as Airbus gradually boosts production rate (with its new FAL at Mobile, Alabama) and transitions to an A320NEO line from the A320NEO and CEO mix line. However, conversion of some of IndiGo’s A320CEO to NEOs is expected.
Thanks to Oscar Victor for certain info.
Edit, thanks to Cyril Roy: As per Flightglobal, the 30 A320CEOs have been converted to A320NEOs. No CEOs exist on Airbus’s order book for IndiGo. In the light of this, it may seem that Tigerair’s 12 A320 will fill the gap for exactly a year before NEO deliveries begin
Edit, thanks to Shakti Lumba: Airline’s first aircraft delivery changed to July from June, 2006. Start of operations corrected to 4th August, 2006 from 15th August.
Indigo – the Indian airline known to religiously adopt best low cost carrier practices, thanks to its founders who brought with them unequalled relevant airline experience, has taken yet another step to lower costs, and in part increase passenger comfort.
IndiGo flies one aircraft type- The A320-232, with some of the newer ones featuring fuel saving wingtip modifications known as ‘Sharklets’. As of date, the A320 can seat a maximum of 180 passengers in an all-economy cabin layout. With such a configuration, all seats, with the exception of those at row 1, 12 and 13-the later two being emergency exit row seats- feature a 29 inch seat pitch.
Of the 29 inches in seat pitch, around 4 inches may be subtracted due to the thickness of the seat, leaving an effective room of about 25 inches, or 2′ 1″. For an average Indian with a height of around 171cm and a Body Mass Index (BMI) of 24, this leaves between two to three inches between the knee and the seat pocket in front. Magazine thickness in the seat pocket affects how much ‘knee’ room is finally available.
With SpiceJet talking about its latest cabin product SpiceMAX, where the first five rows of most of its Boeing 737-800 & -900 aircraft feature a generous 35 inches of seat-pitch, or about 31 inches from the backrest to the seat pocket in front – or half a foot more than IndiGo’s offering, IndiGo may have felt threatened by its inability to match such a product for its passengers. The Flying Engineer learns that the airline has recently changed its passenger seats to the Dragonfly from SICMA Aero, which manufactures and sells aircraft seats under ZODIAC Aerospace group. The airline previously flew the model ‘5600’ seats from Weber seats – the company which in 2012 became Zodiac Seats U.S. LLC, which is now a subsidiary of Zodiac Aerospace of France, and is one of the largest manufacturers of airline seats in the world.
The new ‘Dragonfly’ seats offer a double advantage and a disadvantage.
The new seats are thinner, and lighter. Thinner seats free up more legroom. The seats offer between and inch and two of extra legroom. The lighter seats shave off 700kgs from the airline’s aircraft’s operating empty weight. 700kgs on a Bangalore-Delhi sector of 1000NM translates to a saving of about 50kgs of fuel per such flight. The savings are as low as 0.6% for a short (200NM), full flight, and 0.8% for a long (1000NM), full flight, and can touch 1% when load factors are lower. With savings between 10kg and 50kg of fuel, dependant on the flight, an assumed 20kg of saving per flight, on average, translates to a saving of 3.65 million kg of fuel per year, assuming 500 daily flights. This translates to INR 34 Crore per year, with an average fuel price of INR 74.69 per litre.
The disadvantage, as reported by a recent flyer on board IndiGo, is the discomfort associated with such seats. The manufacturer describes, “With its ergonomic stamped backrest, the Dragonfly offers tremendous operational savings, fewer parts and increased cabin density – all the while adapting to finicky passengers’ growing desire for improved living space”. However, comfort isn’t stressed upon as much as the 5600’s, and the thinner cushioning has been reported as relatively uncomfortable.
Further, unlike the model 5600, the Dragonfly seats may not be IFE capable.
The seats on board IndiGo’s A320s are 18 inches wide, inner armrest to inner armrest. Airbus offers customers an option of 17 inches seat width with a 25 inch wide aisle – a configuration designed for quick turnaround times, or 18 inches seat width and a 20 inch wide aisle – a configuration designed for enhanced passenger comfort.
To be fair, the seats on SpiceJet’s 737s – as are all 737s, world over- are only 17 inches wide. Barring the first five rows of ‘SpiceMAX’ seats, and seats on the emergency exit rows, most other seats on SpiceJet’s 737s feature a 29 inches seat pitch, which offer a passenger 25 inches from the backrest to the seat pocket, and 17 inches in seat width. IndiGo’s seats, however, offer one to two inch more legroom, and one inch more seat width, catering to the ever increasing population of those with above-normal BMIs. The new seats allow the airline to offer more space uniformly across the cabin, while saving money, too.
An eye on costs is what the airline is known for: the airline has a very strict fuel policy, wherein the airline, and not the captain, decides on how much extra fuel must be uplifted. This has been possible due to a strong analysis of historical fuel data. The airline also incurs a cost of between INR 4 and 5 for every kg of potable water that is uplifted. The capacity of the potable water tank is 200 litres, but the airline monitored water consumption for every sector, and now only fills between 40 litres and 120 litres, depending on the sector. As a result, the airline saves between INR 320 and INR 640 per sector. Assuming a very conservative saving of INR 300 per sector – the airline saves, over 500 flights a day and over a year, almost INR 5.5 Cr.
Savings – possible through constant innovation, quick adoption of fuel saving technologies, constant analysis, great strategies, and strict implementation.
It has been learnt that IndiGo may be flying TigerAir’s Airbus A320 aircraft on a ‘short term lease’.
The move gains prominence in the light of four developments: IndiGo’s original 100 airplane order will be completed in the December of 2014, new competition from TATA-SIA and AirAsia India has made IndiGo upward revise its expansion plans, IndiGo has now extended the lease of its airplanes to 10 years from the previously financially viable six years, and Tigerair Mandala ceased operations on 1st July 2014.
IndiGo had ordered 100 Airbus A320 aircraft in the June of 2005. With the 100 airplane order completing in the December of 2014, the 180 airplane order placed in June 2011 kicks in, which comprises 150 A320 new engine option (NEO) and 30 A320 classic engine option (CEO).
With IndiGo inducting 19 A320s in 2012 and 17 A320s in 2013, the 30 aircraft which are part of the new order may be inducted into the fleet by the third quarter of the calendar year 2016, perfectly timed to coincide with the A320 NEOs for the airline. Initial production rate of the A320NEOs will be low as it will share the line with the existing A320s. The A320NEO’s expected entry into service (EIS) is early 2016.
While this was the plan for IndiGo, it seems like the competition has messed them up. To retain market share and maintain an edge, the airline is possibly looking to scale up operations, considering the new routes that are being added, and the fact that the airline is trying to keep its airplanes in its fleet longer, through a lease extension.
To support its expansion plans, IndiGo has been inducting at least one aircraft every month, with as many as four in a month. However (and surprisingly), for unclear reasons, the airline has not inducted any aircraft in the months of May and June. VT-IAP, the yet to be delivered A320, may likely be inducted in August. This will take the fleet size to 79 aircraft, and will be the 95th aircraft from the 100 airplane order., leaving five airplanes to be delivered across the five months August-December.
On July 1st, 2014, Indonesia’s Tigerair Mandala ceased operations. This is the second time ‘Mandala‘ as an airline has ceased operations, and this time it was after Citilink and AirAsia refused to acquire the airline. This has placed nine Airbus A320 aircraft from the airline into storage at Kuala Lumpur, which means nine A320s are available for grabs. The Flying Engineer believes that some of these A320s may make their way to IndiGo under a ‘short term lease’.
Inducting Tigerair Mandala’s A320s into the fleet won’t be an engineering hassle for the airline as these aircraft are also powered by the IAEV2527-A5 engines: the same ones that power the A320s at IndiGo. The cabins are laid out in a dense economy configuration of 180 seats, similar to IndiGo’s. None of the aircraft have the fuel saving ‘sharklets‘.
While this may seem like IndiGo’s knee-jerk reaction to opportunities and market dynamics and competition, it must also be noted that such measures are adding a degree of ‘stickiness’ to IndiGo’s otherwise well planned operations. The airline’s older aircraft, especially some above the age of six years, are starting to appear dirty on the outside-the fuselages of those airplanes are no longer fully white. IndiGo had in the past taken care to ensure its airplanes were clean.
If the Tigerair lease materialises, then it will be the first time in IndiGo’s history that the airline will operate aircraft previously used by another airline, and for the first time will fly airplanes that were previously used.