Story ID: 032Ma18
Indian Budget Carriers Hold Long-haul Aspirations
By: Neelam Mathews
Caption: SpiceJet, IndiGo considering widebody orders
Word Count: 432
The arrival of new aircraft technology, emergence of new business models, and the increasing ambition of India’s budget carriers appear likely to lead to a new wave of expansion on international long-haul routes. As India’s outbound leisure traffic grows following demand of the fast-growing middle class, budget carriers SpiceJet and IndiGo have begun preparing to fly long haul. Plans for widebody aircraft could come soon.

According to Centre for Asia Pacific Aviation (CAPA), SpiceJet and IndiGo will probably launch their first European long-haul flights to London Gatwick. SpiceJet chairman Ajay Singh confirmed at the recent Wings airshow in Hyderabad that his airline will introduce low-cost, long-haul flights “as early as this winter.” A government official told AIN that the carrier is looking at flying to the U.S.

According to a CAPA report, by 2025 Indian budget carriers will operate approximately 40 widebody aircraft, adding 2 million annual outbound passengers to destinations such as New York and Sydney. 

India has seen international passenger traffic grow over the last five years at a compound annual growth rate of 8.6 percent, what a joint CAPA India and Expedia report released in February called “the inflection point for India outbound travel.”

“We lack a direct low-cost alternative,” said minister of state for civil aviation Jayant Sinha. “But that will depend upon how fast airlines are able to expand their fleet and how airports work at improving constrained infrastructure. We lack a direct low-cost alternative to Europe and the U.S. West Coast. International traffic growth from India will be tremendously boosted if low-cost carriers start providing connectivity to Europe.” 

Apart from widebody services to Europe, Australia, and the U.S., CAPA said Indian airlines will likely take advantage of new market opportunities for non-stop routes between India to Hong Kong, Phuket, Manila, and Hanoi, having placed orders for nearly 800 Airbus A320neos and Boeing 737 Max jets. IndiGo, which recently announced it had withdrawn interest in Air India’s disinvestment, operates 166 A320Ceos and Neos and has placed orders for 400 more. Widebody options for it include the A330-800neo for 2019 and/or the A350-800, scheduled for first delivery in 2021. In a conference call with analysts, IndiGo’s co-promoter, Rakesh Gangwal, called the airline “well placed to ferry long-haul international passengers in a low-cost model.”

“If there is any market where low-cost, long-haul can work it is India," said CAPA India CEO Kapil Kaul. He added that India’s location and a large order for new long-range narrowbody jets would provide the momentum.