Qatar Airways is interested in IndiGo. Will flydubai scout for an Indian partner as well?

Now that India has opened its doors to foreign airlines’ FDI, will flydubai also scout for an Indian airline to invest in? CEO Ghaith Al Ghaith says if flydubai were to enter into a partnership, even an equity partnership, with an Indian carrier, it will only add value to flydubai. But he also qualifies this statement by saying that any investment in an Indian airline is purely his personal wish and that at the moment, there is no such directive from flydubai’s parent, the Government of Dubai.

Emirates airline, also owned by the Government of Dubai, is also aggressive on India expansion but has made it clear it is not interested in acquiring an Indian airline despite FDI rules being relaxed. But Etihad Airways, another UAE carrier based in Abu Dhabi, has used the acquisition route to rapidly grow its global network; it has also bought 24% stake in Indian Jet Airways and become the first foreign airline to buy into an Indian one since FDI rules were relaxed. If Etihad can, why not flydubai?

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Now, according to this Reuters report,Qatar Airways’ chief executive officerhas expressed interest in taking a stake in India’s IndiGo airline.

So will the rapidly expanding low cost airline from Dubai, flydubai, actually look for attractive investment targets among Indian airlines?

Ghaith says “never say never, but no such directive from the Government as of now, we are only five years old, have 111 aircraft on order …. do not have enough focus left in us to look at an acquisition. Our plate is full at the moment. Personally though, would like to look at this”.

To a question on whether flydubai was open to other kinds of partnership with Indian airlines, Ghaith says flydubai’s doors are open for any such alliance though the airline is not currently in talks with anyone.

flydubai, much like Etihad Airways, is a relatively young airline which is just five years old. Its aggression can be gauged from several recent decisions, including one where it ordered 111 aircraft. flydubai is aggressively expanding in India and has already said it will add three newIndian cities to its network soon. This will mean it will fly 19 services to six destinations against 9 to three destinations in India at present. For the first time, flydubai will also offer Business Class seats on the three new routes.

But for Ghaith, even this is not enough. He says flydubai’s ambition is simple: get permission to fly into more and more cities in India, even tier II cities. He brushes aside any talk of saturation on the India-Dubai route, pointing out the obvious: only two Dubai carriers fly on this route (Emirates and flydubai) whereas six Indian airlines fly too. He also says there is no question of saturation capacity between India and Dubai and that if flydubai is allowed to expand more, it will connect smaller Indian cities to Dubai and provide passengers from these cities onward connections within the Gulf and further.

India and Dubai have recently increased the weekly seat entitlement for airlines from both sides by a little over 11,000 seats and some of this increase is being put to use by flydubai by beginning services to three new cities. But Ghaith wants more. The three new flights mean flydubai will offer 3500 seats a week against 1701 seats earlier.

“Let’s look at an example. We have 9 services between Doha and Dubai, Emirates has 5 or 6 and Qatar Airways has 13. We believe more flights add economic value for countries and for the consumer. So if we are permitted, we can launch flights to smaller Indian cities from where there is enough traffic towards Dubai and onwards,” Ghaith says.

After getting Delhi on its map, flydubai is eyeing Mumbai, Bangalore and Chennai and these cities may be added when the next tranche of new seats under the ASA is released.