Explained: Why the IndiGo vs Air India debate is a sign of things to come

A tweet by consultancy firm CAPA set off a debate on who - Air India or IndiGo - has the higher capacity on international routes. Also, which is a better measure of capacity - seats deployed or ASKMs?

Published: Sep 4, 2019
Explained: Why the IndiGo vs Air India debate is a sign of things to come Image: Shutterstock

What's the hullabaloo about?

On August 23, aviation consultancy CAPA tweeted that IndiGo has become the largest single international airline operating to/from India in terms of seats deployed with a share of 11.7 percent.

Wow. Wasn't Air India the Maharajah of international skies?

Precisely, it was the reason the national carrier did not take too lightly to the claim. Air India called the CAPA analysis "flawed and misleading" and added that ASKMs were the true measure of capacity, not seats deployed.

Interesting. What do these ASKMs show?

Numbers disclosed by Air India show that the government-owned airline had a share of 17.2 percent in international routes in August, compared to 8.5 percent of IndiGo's.

That's half of Air India's share! Did CAPA agree?

Yes. It reiterated that its analysis was based only on seats deployed. And when it came to ASKMs, Air India still had the lead.

Ah. But wait. Am a bit confused.

Me too. The two parameters have different results.

First, what are ASKMs?

It is available seat kilometres and measures the passenger carrying capacity of an airline. It is derived by multiplying seats in an aircraft by the kilometres flown. It is an important barometer of an airline's efficiency. The higher the ASKMs, the better.

Ok. So how is it different from seats deployed?

Let's use an example. Say an aircraft has 100 seats. Those are the seats deployed. ASKMs are more detailed. If the 100-seat aircraft flies 100 km, the ASKMs is 100x100= 10,000 Seat Kilometres(SKs).

How come Air India's ASKMs are more than double of IndiGo's?

Two reasons. Air India flies to more and further international destinations than IndiGo. Air India flies to 42 destinations, compared to IndiGo's 21.

Also, Air India uses wide body aircraft that have more seats than the A321 Neos that IndiGo deploys on international routes.

So, not only does it have more seats per aircraft, but also flies many more kilometres than IndiGo. Thus, its ASKMs are much higher.

Interesting. That clears a lot of things. But, does it mean that CAPA's finding is insignificant?

Not at all. In fact, it probably reflects what is in store. As CAPA pointed out, the number of weekly international seats deployed by IndiGo had jumped by 43 percent in just three months.

That is a pace that cannot be matched by Air India, which is facing serious debt problem and struggling to keep flying.

So, Air India is still the Maharajah of the international skies but its reign is under threat.

Righto. Couldn't have put it better.

Original Source: https://www.moneycontrol.com/news/business/companies/explained-why-the-indigo-vs-air-india-debate-is-a-sign-of-things-to-come-4400941.html

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