India’s airlines, driven by a domestic market that generates little profit and helped by the country’s laws, have developed flight connections with large cities all across the world.
In the last few years, India’s airlines have increased the number of international flights to and from the country. In under five years, the Indian transporters’ market share for this type of flight route has gone from 31 to 38%, reports website Voyages d’Affaires. Though the government has contributed to this rise by limiting the activity of foreign airlines, the strategy applied by Indian CEOs has also played an important role.
A tricky home market
The peculiarities of India’s domestic flight market are pushing airlines to increase their number of international flights. Various taxes lead to high operational costs, and the proliferation of domestic airlines is limiting profits.
The companies concerned can barely manage to draw a profit for this type of flight, though the number of passengers has doubled in four years and the occupancy rate is around 90%. India’s airlines are therefore seeking to extend their international flight offer.
Future stopover hubs
National airline Air India, as well as Jet Airways, low-cost airline Spicejet and even Vistara, are launching routes that connect the Indian cities of Delhi, Madras (Chennai) and Bombay (Mumbai) with major cities across the globe. The aim is that, in the future, the country’s major airports could become stopover hubs for passengers from all over the world.
With its flights from Delhi to London, Paris and Frankfurt, Air India is responsible for 17% of India’s international connections. In 2017, private airline Jet Airways inaugurated its Paris - Madras route, and in November will start flying between Manchester (United Kingdom) and Bombay. A flight between Mumbai and Sydney is also in the pipeline. Spicejet and Vistara are also intending to launch their first international routes over the next few months.
Contact Allianz Partners
Apr 28, 2017
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