India's leading low-cost carrier IndiGo may dump its low-cost fares on its international operations, which is slated for take-off on September 1.
The carrier is still engaged in talks with the government in a desperate move to fly from Delhi IGI Airport's low-cost Terminal 1D instead of the swanky Terminal T3, where they would end up paying higher airport charges.
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A top industry official said that IndiGo's fares on international routes will be affordable but not necessarily be the lowest given the high airport costs, which they would have to bear while operating from the flashy and costlier Terminal T3 of IGI Airport.
"We have built up a reputation of being the No. 1 low-cost airline with the best on-time arrival and the best serving airline in the country. Even if our fares on international routes are slightly higher, our dedicated customers will not mind paying more given the kind of services we offer," said an official associated with IndiGo.
"The airline is still discussing the terminal issue with the government," said the official. When contacted, IndiGo's chief executive officer (CEO) Aditya Ghosh and chief operations officer (COO) Sanjay Kumar refused to comment.
IndiGo had earlier said it would continue with its low-cost fare model for its international operations, too, which would be competitive vis-à-vis rival airlines.
However, things seem to be going the other way round after the civil aviation ministry clearly stated that IndiGo would have to fly from IGI's T3. Operating from T3 would entail 20-30 per cent higher costs for the airline.
Industry sources said IndiGo cannot sustain its low-cost fares on international routes because once it starts flying from IGI's T3 it will end up paying more for its international operations.
Terminal 3 charges more for fuel because of the extra infrastructural facilities such as underground pipelines. SpiceJet and Indigo, low-fare rivals of full-service carriers such as Jet Airways and Kingfisher Airlines, use the old terminal and pay less for fuel.
IndiGo and SpiceJet, which currently refuel their aircraft at Terminal ID, would need to pay Rs 800- 1,200 per kilolitre more at T3. Passengers also complain about the extra time needed to identify different check-in counters at the massive T3.
Jet Airways and Kingfisher Airlines want to move out of the spanking new T3 opened last year, angered by the high price charged for fuel. Aviation ministry officials said it cannot allow IndiGo to operate from Terminal 1D as its rivals Kingfisher and Jet Airways too want to move to Terminal 1D.
IndiGo will launch its daily international flights on the New Delhi-Dubai route from September 1 and subsequently launch services from New Delhi to Bangkok on September 8 and from New Delhi to Singapore on September 15. The carrier will launch its services from Mumbai to Bangkok and Dubai on October 2 and from Mumbai to Singapore and Muscat on October 10.
IndiGo will operate Airbus A320 aircraft on all international services.
IndiGo operates 42 A320s. At the Paris air show it had firmed up orders for 180 A320, of which 150 will be A320neo.
All the new flights will be daily, except the Mumbai-Muscat sector, which will be four times per week.
IndiGo's domestic market share has increased from 33.3 per cent in December 2009 to 39.7 per cent in June 2011 while national carrier Air India has seen its share decline from 18.3 per cent in December 2009 to 14.9 per cent in June 2011.
Courtesy: Mail Today