New Delhi: International airlines, that have seen their business out of India grow 12-17% annually for seven of the past eight years, will bear the brunt of the impact of the terror attacks in Mumbai as foreign travellers defer travel to the popular destination.
One in five air passengers in India fly through or from Mumbai, the country’s financial capital. International passenger traffic, expected to grow almost 10% through March 2009 even as domestic passenger traffic is falling, may now moderate to single-digit growth.
The only time international growth contracted—by 2.4% —year-on-year was in fiscal 2002 after the September 2001 terror attacks in the US.
“They (terrorists) are like small military units going around...just to dissuade people (from coming) to India,” insists Robey Lal, former country head for International Air Transport Association (Iata), a travel industry group. “Even when people are coming (travelling) on business, and they can do it on phone, they would much rather do that than show up in person. It will impact everything.”
Around 70% of India’s inbound tourist traffic, itself one-third of India’s total international passengers, is in the September-March period, according to the Centre for Asia-Pacific Aviation (Capa).
This busy season may see a significant drop for at least the next “two-three weeks”, the aviation research and consultancy firm said.
Such a slowdown will particularly hurt because business travel, traditionally a segment that airlines make most profits from, will contract, predicts Kapil Kaul, chief executive of Capa’s India operations.
The relatively high toll of foreign nationals in the attacks could affect the psyche of those who had planned to travel, he said.
International travel globally, according to Iata data released on Thursday, shrunk for the second month running in October
“People cancel their meetings (after such attacks); it has a bearing. But we hope it doesn’t,” said Jitender Bhargava, executive director of National Aviation Co. of India Ltd-run Air India.
Traffic at this time of the year had not yet peaked and there were seats available on the airline’s flights on almost all international routes, he added. Jet Airways (India) Ltd and Kingfisher Airlines Ltd are nascent Indian carriers that also now run overseas services.
On Thursday, several international flights were cancelled. Delta Inc.’s subsidiary Northwest Airlines, which described the Mumbai attacks as “civil unrest” on its website, said it has cancelled its Mumbai-Seattle flight.
Deutsche Lufthansa AG too said it had diverted its Frankfurt-Mumbai flight to Delhi and cancelled the Mumbai-Frankfurt flight on Thursday.
Jimmy Eichelgruen, Delta’s regional manager for sales for Europe, West Asia and Asia regions, said in an email to Mint from London that Delta and Northwest will “review” operations to and from Mumbai “as the situation develops”.
Such cancellations could have an impact on domestic traffic too, since they carry international passengers to smaller Indian cities from the larger domestic airports that global airlines fly into.
Kingfisher, for instance, has a so-called code share arrangement with Northwest Airlines and Qatar Airways, while rival Jet Airways carries American Airlines and Ethihad Airways passengers onward within India.