For­eign air­lines weather In­dian tur­bu­lence

CAPA In­dia’s In­ter­na­tional Avi­a­tion Out­look 2012- 13 fore­sees a num­ber of developments which could sur­prise and re‐de­fine the avi­a­tion sec­tor. Here are the ex­cerpts…

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the In­dian avi­a­tion sec­tor has been through var­i­ous ups and downs, in­ter­na­tional traf­fic has been the steady per­former, grow­ing at a com­pound an­nual rate of 11.8 per cent over the last eight years.

In­ter­na­tional traf­fic growth of 8-10 per cent

In­ter­na­tional pas­sen­ger traf­fic is pro­jected to grow by 8-10 per cent in FY2012/13 to reach ap­prox­i­mately 44 mil­lion. How­ever, much will de­pend upon the de­vel­op­ment of Air In­dia, which has the largest share of in­ter­na­tional ca­pac­ity in In­dia at 14.4 per cent.

Short-haul in­ter­na­tional traf­fic growth to South and South­east Asia, as well as the Gulf and Cen­tral Asia, is expected to be above 10 per cent as IndiGo and Spice­Jet ramp up their over­seas op­er­a­tions. GoAir has also ap­plied for per­mis­sion to launch in­ter­na­tional ser­vices, de­spite the fact that it has not yet met the qual­i­fi­ca­tion thresh­old of hav­ing a fleet of at least 20 air­craft (it has just twelve). How­ever, its ap­pli­ca­tion is likely to be ap­proved. Mean­while, Jet Air­ways may also de­ploy its hy­brid sub­sidiary, Jet Konnect, to de­velop its re­gional in­ter­na­tional net­work.

For­eign car­ri­ers re­main in­ter­ested in the In­dia story de­spite chal­lenges

In the last few months, a num­ber of car­ri­ers have ei­ther sus­pended ser­vices to In­dia (in­clud­ing AirAsiaX, Amer­i­can Air­lines and Qan­tas) or re­duced fre­quen­cies on cer­tain routes (Air France, Aus­trian and Lufthansa). Jet Air­ways re­cently an­nounced plans to sus­pend its Mum­baiJo­han­nes­burg ser­vice from June 12. Rea­sons for these re­duc­tions have in­cluded in­suf­fi­cient traf­fic, poor yields and high air­port charges.

For ev­ery air­line that has faced chal­lenges, there are sev­eral in­cum­bent car­ri­ers that see growth op­por­tu­ni­ties, pri­mar­ily those from emerg­ing re­gions such as Asia, Africa and the Mid­dle East. Drag­o­nair has an­nounced plans to launch ser­vices to Kolkata from Novem­ber 12 • Eti­had will launch an Abu Dhabi-Ahmed­abad ser­vices from Novem­ber 12 • Vir­gin At­lantic will re­sume Lon­don-Mum­bai ser­vices from Oc­to­ber 12 • Kenya Air­ways com­menced a non-stop Nairobi-Delhi ser­vice on May 12 • Air China launched a Chengdu-Mum­bai ser­vice on May 12 • Iraqi Air­ways launched routes from Bagh­dad to Delhi and Mum­bai in Q1 2012 • bmi com­menced a Lon­don-Am­rit­sar ser­vice on Oc­to­ber 11 • SilkAir launched a new Sin­ga­pore-Kolkata route on Au­gust 11 • Sin­ga­pore Air­lines has launched five ad­di­tional fre­quen­cies to Mum­bai in the last year

Vir­gin At­lantic will ben­e­fit from the sus­pen­sion of King­fisher’s Mum­bai-Lon­don op­er­a­tion and is plan­ning to sched­ule the ser­vice to fa­cil­i­tate con­ve­nient on­ward con­nec­tions to at least four US des­ti­na­tions. The air­line is expected to emerge as an im­por­tant player on Mum­bai-UK and Mum­baiUS routes.

Mean­while, Africa is a re­gion of grow­ing in­ter­est. Kenya Air­ways, which launched its sec­ond In­dian des­ti­na­tion on May 12, has al­ready iden­ti­fied 4 cities; Ahmed­abad, Ben­galuru, Chen­nai and Hy­der­abad to plan its fur­ther ex­pan­sion over the next few years. Ethiopian Air­lines has sim­i­lar ex­pan­sion plans.

Sev­eral air­lines that do not cur­rently op­er­ate to/in In­dia are in the process of eval­u­at­ing the pos­si­bil­ity of en­ter­ing the mar­ket in the next 12 24 months which in­clude:



Al­i­talia and Czech

Garuda In­done­sia, Jet­star Asia, Lion Air, Myan­mar Air­ways and Viet­nam Air­lines


Air Aus­tral

But car­ri­ers such as Emi­rates, Qatar Air­ways and Turk­ish Air­lines have the most ag­gres­sive ex­pan­sion plans and are push­ing for ad­di­tional bi­lat­er­als as their cur­rent en­ti­tle­ments are ex­hausted. Emi­rates, al­ready op­er­ates 184 weekly ser­vices to ten cities across In­dia, not in­clud­ing its low cost sub­sidiary, fly­Dubai, but has ex­hausted its bi­lat­er­als.

Turk­ish Air­lines, which has daily ser­vice to Mum­bai and Delhi, is seek­ing to in­crease the fre­quency to dou­ble daily and wishes to op­er­ate to an ad­di­tional six des­ti­na­tions.

Kapil Kaul

CEO South Asia, CAPA

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