Qatar Airways, IndiGo in code-share talks

No equity deal, move will help Qatar Airways counter Jet-Etihad alliance

Qatar Airways is in talks with IndiGo for a code-share alliance that would allow the Gulf-based airline to spread its network to more Indian cities, taking on the Jet-Etihad combine for a larger pie of India’s international traffic.

IndiGo, the country’s largest domestic airline by market share, did not respond to a query. Qatar Airways CEO Akbar Al Baker, interacting with the media on the sidelines of a travel show in Dubai yesterday, had confirmed talks were on with the Indian carrier. The code sharing would allow Qatar to place its code on the domestic and international flights of IndiGo, which has a fleet of over 60 Airbus 320 planes. The move could help Qatar increase its revenue and network from India.

Earlier, Abu Dhabi-based Etihad, which went on to buy a 24 per cent stake in Jet Airways, had also entered into a code-share agreement with the Indian partner for a few cities.

After the civil aviation ministry recently increased the seat capacity between India and Abu Dhabi from 13,000 a week to over 50,000, the Qatar government, too, asked for a major increase in seat capacity between India and Doha — by 48,000 a week. If cleared, this could help Doha, with 72,600 seats a week, emerge as an alternative hub to Dubai, as well as Abu Dhabi.

At present, Qatar Airways operates 95 flights to 12 Indian cities. If the code-share agreement is sealed, it would be able to bring in passengers seamlessly from the 28 domestic destinations through which IndiGo flies to Qatar’s hubs in India, from where they can fly to Doha and beyond. IndiGo still does not fly directly to Doha; its request for 2,500 seats a week is pending with the government.

However, unlike in the Jet-Etihad code sharing where both the parties were full-service carriers, in this case, Qatar is a full-service player and IndiGo a low-cost carrier (LCC). Typically, there are difficulties in forging such an agreement between an LCC and a full-service player, given the varying needs of the two models.

“Yes, we are talking to IndiGo to see how we can strike a relationship. IndiGo is an airline that is not for sale. We only want to do a code-share partnership. And, we want to get into a situation where we work together, because it is the best airline in India today. I am in touch with IndiGo’s co-founder Rahul Bhatia. We hope we will be doing this soon,” Al Baker told Dubai-based Gulf News. “We have very high regard for IndiGo. I think it’s the most efficiently-run airline,” he added.

He denied his airline was looking to invest in any Indian carrier. “I don’t have so much money to buy stakes in airlines. I never talked about SpiceJet or GoAir. We are not interested in either. The brokers or the shareholders create these rumours to increase the value of their shares.”
WHAT’S A CODE-SHARE ALLIANCE?

• Full-service airlines build networks in two ways — deploying own capacity or partnering with other airlines through commercial agreements. These include interline agreements and code sharing, which allow an airline to sell tickets on flights operated by other airlines
• Interline is an arrangement to sell tickets, while a code share is like a commitment for it
• In a code share, one (marketing) airline places its code on flights operated by the other airline
• In terms of revenues, a code share gives an airline better options than an interline agreement, as it allows sale of tickets in more fare slabs than in an interline agreement
• Frequent flyers get to earn miles in a code-share alliance, unlike in an interline arrangement