IndiGo Plans UAE Expansion
India’s biggest airline IndiGo is planning to further expand its network in the Middle East with the addition of a new point in the United Arab Emirates (UAE).
CEO Ronojoy Dutta has confirmed that the LCC intends in the near future to begin serving Ras Al Khaimah, which will become the fourth of the emirates to feature on the carrier’s route map.
IndiGo already offers flights to Dubai International (DXB) from 12 destinations in India, as well as Abu Dhabi (AUH) from eight points, and Sharjah (SHJ) from three.
At the present time, Ras al Khaimah (RKT) has only one nonstop route to India. Air India Express serves the airport from Kozhikode (CCJ), a coastal city in the south Indian state of Kerala. SpiceJet previously offered regular scheduled service to RKT from both Delhi (DEL) and Mumbai (BOM), but OAG data shows that the last of those flights operated in March.
According to figures provided by Sabre Market Intelligence, O&D traffic between India and Ras Al Khaimah totaled just 15,700 two-way passengers during 2019 when the sole nonstop route was the Air India Express service from Kozhikode. However, traffic then jumped to 72,000 passengers during the 2021 calendar year following SpiceJet’s entry to the market in November 2020.
“We resumed our scheduled international operations to most of our pre-COVID destinations and we are now roughly operating at pre-COVID international levels,” Dutta said on a conference call following the publication of IndiGo’s first quarter financial results on Aug. 3. “We launched new service to Bahrain on Aug. 1 and plan to launch Ras Al Khaimah soon.”
The Bahrain (BAH) route from Mumbai will operate daily with Airbus A321 aircraft and become the 25th international destination in the airline’s network and its 99th overall. Bahrain also becomes the 10th point in the Middle East served by IndiGo.
IndiGo’s planned Ras Al Khaimah expansion was announced as the company reported revenues of INR 130,188 million ($1.64 billion) during its first financial quarter for the three months to June 30, up by 310.7% on the same quarter in 2021. Loss before tax narrowed to INR 10,642 million, down from INR 31,742 million a year ago.
“Looking ahead, the second quarter is seasonally the weakest quarter,” Dutta said. “Given this seasonal weakness we do anticipate the second quarter revenue performance to decline sequentially but as of date we do not see any evidence of revenue weakness apart from seasonality.
“Unfortunately, the seasonal revenue decline, coupled with high costs, will lead to profitability challenges.”
However, he added that IndiGo’s prospects are “highly encouraging,” and its expansion is being accompanied by strong growth in connecting traffic. “Additionally, the XLRs which are currently expected in 2024-2025 will allow us to capture nonstop international traffic which is now only served through one-stop competing hubs,” Dutta said.
OAG data shows that IndiGo plans to operate about 26.4 million seats in the quarter to Sept. 30, about 23.6 million of which will be on domestic routes. This compares with total capacity of 22.6 million in the same 2019 quarter.
The airline operates a fleet of 146 A320neos, 35 A320ceos, 65 A321neos and 35 ATRs.