×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

New international flying rights to boost local airlines’ market share

New international flying rights to boost local airlines’ market share
Comment E-mail Print Share
First Published: Sun, Jan 23 2011. 10 49 PM IST
Updated: Sun, Jan 23 2011. 10 49 PM IST
New Delhi: India’s airlines are likely to increase their share of the market of passengers flying abroad, with the aviation ministry granting them fresh flying rights to a number of overseas destinations.
Also See | Seat Strength (Graphic)
The new flying rights, which were on hold for up to eight months, were awarded last fortnight by the ministry, with the largest chunk going to Jet Airways India Ltd, said two people familiar with the development, who did not want to be identified.
Until 2005, Indian airlines controlled 25-30% of overseas-bound traffic, which has increased to 40% now. These rights can help Indian carriers raise their share of the international traffic from India to 50% over the next two years, said experts.
“There will be resumption of expansion this year. Except GoAir, every carrier will have some international operation,” said Kapil Kaul, chief executive officer, South Asia, for the aviation consulting firm Centre for Asia Pacific Aviation (Capa). “The real thrust would be felt by fiscal of 2012-13.”
The country’s international traffic has traditionally been dominated by overseas carriers. National flag carrier Air India was the only local airline flying out of the country until about a decade ago. This began changing in the middle of the last decade, with Jet Airways expanding to South Asia and beyond.
Naresh Goyal-controlled Jet Airways has been cleared to start new services to Europe, including flights to Rome and Amsterdam from Mumbai. India’s largest airline by passengers carried has also been allocated additional rights for flight on Mumbai-Kuala Lumpur, Bangalore-Bangkok, Delhi-Bangkok, Mumbai-Abu Dhabi, Mumbai-Dubai, Mumbai-Male and Thiruvananthapuram-Sharjah routes.
The 116-aircraft airline had also sought rights to fly to Paris, a route currently served by Air India and Air France, but that has been kept in abeyance.
It has, however, been allowed to enter into agreements with European rail companies that would allow it to sell connecting train routes on its air tickets, said one of the two officials mentioned above.
Mint first reported on 20 December about this agreement, which can help connect Jet Airways passengers from its European hub of Brussels to Paris via train
SpiceJet Ltd, with 25 aircraft, will now be able to fly to Colombo from Mumbai and add flights on the Chennai-Colombo route, while Kingfisher Airlines Ltd can reach the Sri Lankan capital from Mumbai and Trichy.
IndiGo, run by InterGlobe General Aviation Pvt. Ltd, has been cleared to operate daily flights to Bangkok, Singapore and Dubai from New Delhi and Mumbai, as well as to Muscat from Mumbai—all considered high-traffic routes.
In November, Jet Airways’ chief commercial officer Sudheer Raghavan told Mint the airline will expand Europe in mid-2011.
“I think our next expansion will come around second half of 2011 by way of new cities, though we will continue other minor increases,” Raghavan said. “You see in Europe as a region, there are a handful of hubs—Frankfurt, Amsterdam, Paris, Zurich, Vienna in continental Enetwork urope—if you want to be a player. We cannot close our network development to these hubs. That’s where the markets sit, we go where the market sits.”
The airlines have also lined up fleet expansion plans.
Four long-haul Boeing 777 aircraft, which Jet leased out to Turkish Airlines during the 2008-09 economic downturn, will return to the airline between July and October.
SpiceJet, which started international services last year to Kathmandu and Colombo, plans to add eight Boeing 737 and eight Bombardier Q400s this year. The airline plans to add flights on international routes it is already serving, rather than launch new routes.
“I would rather put more flights from various parts out of India to Colombo and Kathmandu,” SpiceJet chief executive officer Neil Mills said early last week.
IndiGo will start low-cost flights from August, adding 14 A320s this year to the 34 it has.
Kaul of Capa said he expects Jet to open new routes in Europe, SpiceJet to maintain its operations in South Asia, Air India to expand its network and IndiGo and Kingfisher to focus on closer international routes in West Asia and South East Asia, which can be serviced through Airbus A320 aircraft.
This year, Air India is also expected to join the Star Alliance of global airlines, nominated by Lufthansa, while Kingfisher will join OneWorld, nominated by British Airways.
Air India also pulled out from Frankfurt as its European hub, shifting focus to terminal 3 of Delhi’s Indira Gandhi International Airport and connecting its long-haul flights non-stop with Boeing 777 and Airbus A330.
An expert said European carriers such as Lufthansa, British Airways and Air France, which have traditionally dominated the Indian market, are more concerned about West Asian carriers’ expansion plans than those of Indian carriers.
“The overall Indian market is growing, so as long as the rising tide lifts all boats, international traffic share isn’t as critical as the number of passengers,” said Vikram Krishnan of US-based consulting firm Oliver Wyman.
“I think the European airlines are more worried about their competitors in the Gulf—Qatar, Emirates, Etihad—than they are about the Indian carriers getting additional rights.”
Photo by Vijayanand Gupta/HT; graphic by Yogesh Kumar/Mint
tarun.s@livemint.com
Comment E-mail Print Share
First Published: Sun, Jan 23 2011. 10 49 PM IST
More Topics: Jet Airways | GoAir | IndiGo | Air India | Aviation |