Qatar Airways is narrowing the gap with rival Emirates, which two years ago was 85% larger than Qatar. Last year Emirates was 69% bigger. But Qatar’s growth has been lopsided, especially in India, whose 1.3 billion people, dysfunctional flag carrier, and close proximity to the Gulf should empower Middle East hubs. Emirates is successful: it flies five times a day to Mumbai, India’s largest city, and sells a sixth flight from sister flydubai. Emirates even uses the A380. Qatar? It has just one flight a day to Mumbai. The difference is in traffic rights. While Dubai and Abu Dhabi have received additional traffic rights this decade, Qatar’s entitlement is unchanged since 2009. Not only has Qatar fallen behind on growth, it has become imbalanced trying to amass a position similar to Emirates in Europe and North America but without the connections to India.

Unable to grow in India on its own, Qatar has formed a codeshare partnership with IndiGo, the largest airline in India. Unlike many codeshares that are over-hyped, the Qatar-IndiGo partnership gives both a new growth platform, which if scaled could be more significant than they acknowledge. Their challenge is finding a suitable financial framework.

The initial partnership is one-sided with Qatar codesharing on IndiGo flights between Doha and three Indian cities: Mumbai, Delhi, and Hyderabad. Before the codeshare, Qatar could feed its global network with only its single Mumbai flight. Now it can sell IndiGo’s double daily Mumbai-Doha flights, letting Qatar fill more connecting flights from Doha to London, New York and more.

The upside for IndiGo is greater passenger volume. Qatar flies between India and Doha so it can transfer passengers to other destinations, generating a dizzy sum of city-pair combinations and possible traffic volume. IndiGo was only bringing passengers between India and Doha, a finite local market.

Only economy passengers benefit from the codeshare on IndiGo, which is a LCC without a premium cabin. Qatar does not sell business or first class tickets on an IndiGo codeshare. While the Qatar and IndiGo economy products are very different, there are simple steps – complimentary food – to bridge the gap. Most important will be communication so passengers do not expect a Qatar-operated flight but are surprised to be on IndiGo.

Qatar gains scheduling options. Previously its single Mumbai flight only let passengers connect to a New York flight that arrives at 3:25pm. If taking the IndiGo codeshare, passengers can connect to a different Qatar flight that arrives in New York at 8:10 in the morning, giving an extra half day.

Qatar is larger in Delhi with two daily flights, but still constrained. Passengers going to Delhi had to depart London at 8:10am, but now with the IndiGo codeshare passengers can leave London at 9:55pm, giving nearly a full day in the city while minimising hotel costs.

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The IndiGo codeshare gives favourable pricing on sample bookings. It is the same cost to arrive in London at 2:15pm on only Qatar flights versus first taking the IndiGo codeshare to Doha and then connecting to a Qatar flight that arrives in London at 6:20am for a full day there. Mumbai passengers en route to New York could save $53 if they take IndiGo and have an extra 2.5 hour layover in Doha compared to the more optimised connections when only flying Qatar.

Benefits could be stronger. Some connections between IndiGo and Qatar produce journey times only five or 45 minutes longer than Qatar’s own schedule. Yet other connections add hours or even a half day. Jointly planning their schedules would optimise bookings, but such coordination is not usually permitted in strict codeshare relationships. Then again, Qatar’s flight times are public knowledge, so IndiGo could judge where to slot itself in.

IndiGo’s Doha schedule is sporadic but it often flies overnight so it can maximise aircraft utilisation in-between daytime domestic India services, its core business. Greater alignment with Qatar may require IndiGo to allocate more daytime flying to Doha, or have longer layovers in Doha so more passengers can connect.

For now, IndiGo may benefit from incremental codeshare sales. They do not take away from IndiGo’s business since IndiGo does not fly to North America and hardly serves Europe. But growing the partnership, by having more Qatar sales and becoming a de facto feeder carrier for Qatar, changes the economics.

IndiGo often sells India-Doha flights for around $220 excluding taxes for various near term and future travel dates. Yet Qatar’s North America and Europe pricing mean that if it is giving IndiGo revenue on a pro rata distance basis, IndiGo nets around $140 for flying a Qatar passenger. That is far less than if IndiGo sold the seat – assuming it could. If IndiGo’s load factor with its own sales is 90%, Qatar codeshare passengers are incremental and do not displace IndiGo’s local traffic. But having only a few passengers per flight weakens Qatar’s opportunity to access more of India.

Qatar and IndiGo have not disclosed their commercial agreement, so Qatar could be giving IndiGo a higher fare for a codeshare passenger than what a traditional pro rata split might suggest. To give IndiGo more revenue, Qatar would have to dilute its own yields. The trade off is Qatar gains more net revenue by carrying a Delhi-London or Mumbai-New York passenger that would otherwise have flown Emirates or another airline.

Greater IndiGo expansion in Doha could depend on accounting. If IndiGo allocates fixed costs – aircraft, head office – to daytime domestic flying, then overnight international flights only need to cover variable expenses.

Additional IndiGo flights into Doha would see India use more of its traffic right entitlements for Qatar. India has long been worried about imbalances in seat capacity from local versus foreign airlines. More Indian-operated flights into Qatar could give the Qatari Government sound reason to argue for more traffic rights.

India allows countries to negotiate for more traffic rights if Indian carriers use at least 80% of their entitlements. This does not apply to countries within 5,000km like Qatar as well as Singapore and Hong Kong, which carry India traffic onwards to North America, Asia and Australia. Indian airlines are reaching their quota of capacity to Dubai, but lack of slots at Dubai International Airport make it difficult for Indian carriers to grow.

Traffic rights are seldom negotiated in isolation. Partnerships seem to sway India: after Etihad Airways invested in Jet Airways and Singapore Airlines co-established Indian carrier Vistara, Abu Dhabi and Singapore received more traffic rights.

India considered but ultimately rejected Qatar’s 2013 request to triple its entitlement from 24,800 weekly seats to 72,600 – which would have given Qatar more access to India than Emirates or Etihad.

Potential traffic right additions give long-term benefit from the codeshare, which in the short-term should boost revenue. Yet for some watchers, the codeshare was a letdown after speculation Qatar would invest in IndiGo.

“This is not the right time,” Qatar Airways CEO Akbar Al Baker said in November, seemingly in reference to an ongoing dispute between IndiGo’s owners. “There is some disagreement within the airline, so we will not comment on our plans for IndiGo till these issues are resolved.”

Al Baker is said to be close to IndiGo co-founder Rahul Bhatia. IndiGo’s international expansion is threatened by Emirates, which is jokingly referred to as the national airline of India. That gives IndiGo and Qatar a common enemy to work against besides their cooperation producing benefits in its own right.