BackAir India set to boost efficiency on routes
According to CCI's assessment on deployment of both air traffic and seat capacity for 2022-2023, Air India and Vistara has shared presence in 48 origin-destination pairs, or on 96 routes
PremiumNew Delhi: Tata Group-owned Air India is expected to consolidate its presence and increase efficiency across 100-plus routes, or over 50 origin-destination pairs, to fully utilize the group’s network of four airlines.
According to Competition Commission of India’s assessment on deployment of both air traffic and seat capacity for 2022-2023, Air India and Vistara has shared presence in 48 origin-destination pairs, or on 96 routes. Travel portals data reviewed by Mint reveals that 22 out of these 48 pairs, offer flights by both the full-service carriers, including Mumbai-Trivandrum, Mumbai-Cochin, Jammu-Delhi, Jammu-Srinagar, Delhi-Varanasi, Delhi-Udaipur, Delhi-Patna, besides the metro-metro connections like Kolkata-Delhi, Delhi-Hyderabad, Mumbai-Chennai, Delhi-Chennai, among others.
In fact, 11 such overlapping routes in the domestic circuit are shared by at least three airlines from the Tata Group such as AirAsia India, Air India and Vistara, including Bengaluru-Delhi, Mumbai-Goa, Bengaluru-Mumbai, Mumbai-Jaipur, Cochin-Delhi, Bengaluru-Hyderabad, Delhi-Lucknow, Delhi-Pune, Delhi-Guwahati, Delhi-Srinagar, and Delhi-Goa.
Internationally, the CCI’s assessment identified 24 origin-destination pairs with overlapping operations by Air India, Air India Express, Vistara, and Singapore Airlines.
An analysis of the airline networks conducted by Mint revealed that 14 of these origin-destination pairs are served by Air India and Vistara. Besides two route pairs, Delhi-Singapore and Mumbai-Singapore, are operated by a three Tata Group carriers: Singapore Airlines, Air India, and Vistara.
The CCI approved the Vistara-Air India merger on 1 September. Ensuring post-merger network efficiency, Air India voluntarily agreed to maintain minimum capacity on domestic routes like Bhubaneshwar-Delhi, Bengaluru-Guwahati, Cochin-Delhi, Delhi-Trivandrum, Amritsar-Delhi, Bhubaneswar-Mumbai, and Delhi-Bengaluru, where its capacity ranges from 45% to 75%. It also committed to minimise capacity on some international routes where capacity share exceeds 50%.
“Because we have competition clearance, once we receive clearance from foreign jurisdictions, we can plan the network together. We can avoid internal competition. Rather than flying parallel to Frankfurt or London, we can space it out so that customer has better spread of schedules and more choice. So it will operate as two separate businesses but complementary rather than competitive sense," Air India chief executive Campbell Wilson told Mint earlier this week.
Similarly, the airline has also stated that it will operate the merged entity of Air India Express and AirAsia India to operate the majority of domestic network under a low-cost model. Hence, a revamp of the airline’s international and domestic network is expected over the next few months.
Separately, the recent order by Competition Commission of India has also shed light on the intense competition among the domestic players with a glimpse of air traffic analysis of 2022-2023 (Apr-Mar) indicating that the current battleground has effectively been reduced to three players, namely Air India group, IndiGo and Akasa Air.
Case in point, for the Delhi-Pune route, around 40-45% of the market share in terms of seats deployed was occupied by Air India group, followed by IndiGo with 30-35%, Go First with 15-20% stake and SpiceJet at 10-15%. Post the insolvency proceedings at Go First this year, IndiGo’s share has now risen to more than 40% stake on the route, and new entrant Akasa has occupied a 5% share while SpiceJet has been restricted to 10%.
Similarly, Air India group airlines had a stake of 40-45% on Mumbai-Delhi route, followed by 30-35% with IndiGo, 15-20% with Go First and 5-10% with SpiceJet. Currently, Akasa has entered into the fray with a nearly 6% stake and IndiGo has also risen its share to almost 40% but SpiceJet’s stake has stuck to around 6%.
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