Lone profit-maker IndiGo among India's big airlines

India's biggest carrier IndiGo, which announced on Wednesday (Oct 15) a deal to buy 250 Airbus aircraft, has consistently racked up profits as rivals have drowned in red ink from cut-throat fare wars.

No-frills IndiGo has posted six straight years of profits - even with India's high fuel taxes, ramshackle airport infrastructure and vicious fare fights - thanks to its zealous cost controls, analysts say.

Billionaire airline co-founder Rahul Bhatia is legendarily tight-fisted, telling Forbes magazine in 2010 his credo is "thinking before spending a single dollar" and asking himself, "Do I need to spend it? Can I get away without it?"

The New Delhi-based carrier, co-founded by Bhatia, who is group managing director, and former US Airways chief executive Rakesh Gangwal in 2006, is unlisted. But analysts say IndiGo, which depends a lot on word-of-mouth recommendations rather than advertising, could stage a debut share offer in mid-2015.

IndiGo's stylish flight attendants and spotless plane interiors give the budget airline a premium feel while its strong on-time performance has wooed business and other customers, giving it a one-third market share.

The purchase of the 250 single-aisle A320neo aircraft - Airbus;s single largest order by number of jets - marks Indigo's bet that air travel is only just taking off in the country of 1.25-billion people, analysts say.

The draft order "reaffirms IndiGo's commitment to the long-term development of affordable air transportation" in India, said airline president Aditya Ghosh. The planes' total list price is €20 billion (US$25.6 billion) but Airbus' discounts will likely cut the cost.

"The deal is a strong indicator of the long-term potential of the Indian civil aviation market," Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG, told AFP.

For decades, Indians depended on the nation's bone-jolting railway but cheap air fares have encouraged tens of millions of increasingly affluent Indians to fly.

Still, air travel is low per person compared with Americans who make over two flights a year. Indians, by contrast, take just 0.4 airplane trips annually, according to government figures.

The plane order is also part of Indigo's drive to keep its fleet young - it retires its aircraft after six years - to minimise maintenance and fuel costs.

Analysts say IndiGo has taken a leaf from budget US carrier Southwest Airlines in containing costs by keeping operations simple.

It flies to fewer destinations than rivals but offers more flights on those busy routes to maximise plane-capacity and uses just one make - Airbus. Just three years ago, IndiGo ordered 100 A320ceo and 180 A-320neos.

IndiGo, which operates over 500 daily flights with a current 83-plane fleet, has also pared costs by keeping planes aloft longer, fast landing-and-takeoff turnarounds and maintaining a lean staff-aircraft ratio.

Still IndiGo has not been immune to India's sharp economic slowdown, reporting profit last year nosedived by 60 percent to 3.17 billion rupees (US$51.6 million).

But IndiGo outperformed other big carriers. Budget SpiceJet, for instance, posted a record 10.03-billion-rupee (US$162.6 million) loss last year while full-service Jet Airways lost 36.67-billion rupees (US$594.5 million).

SOURCE

Tigerair to right-size operations with sublease of aircraft to IndiGo

Tigerair has signed a deal to sublease 12 of its surplus aircraft to the Indian budget carrier IndiGo. In a news release on Thursday (Oct 9), Tigerair said this will help the budget carrier "reduce excess capacity significantly and hence lower related leasing cost".

Most of the aircraft were previously operated by Tigerair Philippines and Tigerair Mandala which were either sold or folded earlier this year. The aircraft will be subleased to IndiGo for a period of between three and four years and Tigerair expects the agreement to reduce its cash flow burden by S$162 million over the sublease periods.

The Singapore-based airline has been struggling to turn in a profit. It booked a net loss of S$65 million for the quarter ended in June 2014.

In its news release, the budget carrier said its liquidity "remains at a healthy level", but that it would be reviewing various funding options, including the possibility of a rights issue to strengthen its balance sheet.

"The sublease agreement resolves our excess capacity issue and puts us in a better position to focus on our Singapore operations. We will actively explore options for the placement of the surplus aircraft subsequent to their return from IndiGo," said Mr Lee Lik Hsin, Group CEO of Tigerair.

The budget carrier has taken other steps as part of its turnaround blueprint. These include the sale of 'non-performing cubs' and cancellation of nine aircraft ordered in 2007, and due for delivery this year or the next. Tigerair will continue to review its network operations and may trim its fleet by a further two to four aircraft if need be, the release added.

SOURCE

Passengers evacuated from plane after smoke scare in India

Passengers aboard an Indian Indigo jet were evacuated Wednesday (Aug 20) using emergency chutes after air traffic controllers warned the pilot about dense smoke as the plane landed at New Delhi airport. Some of the 147 people on the Airbus A-320 flight sustained minor injuries during the emergency evacuation, said a statement from Indigo, India's leading private carrier.

"All the passengers were evacuated by the right-hand-side slide-chute and one left-hand-side slide chute in approximately 75 seconds," the budget airline said. "We confirm that all passengers and crew members are safe."

The plane was arriving in Delhi from Mumbai. Air traffic controllers informed the pilot about "dense smoke" as the aircraft touched down, the airline said, without giving details of the smoke's origin. The captain immediately ordered the crew to evacuate all passengers.

Some local TV channels reported that the tyres of the plane had caught fire, but the Indigo statement said there had been "no fire and this was not an emergency or priority landing".

The scare comes after the US Federal Aviation Administration (FAA) stripped India of its top safety rating, citing a lack of safety oversight. The FAA decision in January was based on an audit last year of the country's aviation regulator that found 31 issues of concern, including a shortage of well-trained inspectors to carry out safety checks.

SOURCE

Qatar Airways wants stake in India's IndiGo

Qatar Airways is interested in buying into India's budget airline IndiGo, the head of the fast-growing Gulf carrier said on Monday.

"We are very keen on investing in IndiGo if it's available," Qatar Airways chief executive Akbar Al Baker said, praising the airline as "the most successful Indian carrier".

IndiGo is "the most efficient Indian carrier and the most progressive Indian carrier... We love to be associated to that success," he told a press briefing on the sidelines of an aviation conference in the Qatari capital.

IndiGo is the only carrier not enduring losses in India, whose aviation sector faces rising fuel costs, a drop in passenger numbers, a slowing economy and a price war triggered by tough competition.

The carrier, which was established in 2006, serves 26 destinations across the subcontinent, and has routes to Nepal, Oman, Dubai in the United Arab Emirates, Singapore and Thailand.

It operates a fleet of 78 Airbus A320s.

Qatar Airways is the flag carrier of the energy-rich Gulf state.

SOURCE

Indian plane evacuated after catching fire in Nepal

An IndiGo flight from Delhi to Kathmandu evacuated passengers using a slide chute on Saturday after its rear wheel caught fire while landing in the Nepalese capital, the carrier, India's largest airline, said.

"After parking, the ground engineer observed smoke and fire from the right brake assembly... All 175 passengers, one infant and six crew members are safe," said a statement, adding an investigation was underway.

The low-cost airline, launched in 2006, is a privately-held success story, famed for placing the largest-ever plane order of 180 Airbus A320 aircraft worth more than $15 billion in 2011.

US aviation authorities downgraded India's air safety ranking in January to category two, saying its aviation safety supervision did not comply with international safety standards.

The downgrade brought India below Pakistan and on a par with countries such as Bangladesh, Ghana and Indonesia, according to the US Federal Aviation Administration.

SOURCE

Bomb scare grounds Indian airliner in Malaysia

An Indian airliner made an emergency landing in Malaysia on Thursday over a bomb scare, but fear turned to puzzlement once authorities discovered the contents of a suspicious package: three gold bars.

The pilot of the IndiGo budget airline flight from Singapore to Chennai in India diverted to Malaysia early Thursday after a crew member found the package in the toilet.

A Malaysian fire and rescue team that inspected the package at Kuala Lumpur International Airport (KLIA) found it contained three bars weighing less than 1 kilogramme (2.2 pounds) combined.

They were believed to be gold but authorities did not confirm that.

After evacuating the more than 100 passengers, a search found nothing dangerous.

"It was not chemicals. It was bars of gold-coloured metal wrapped up in cloth," said Sani Harul, a fire official.

The airliner later resumed its flight to India. The case is being investigated.

"We questioned the crew, but not passengers, as the yellow-coloured items were found in the toilet, not in anyone's possession," police official Zaldino Zaludin said.

SOURCE