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International services to India show strong growth but remain constrained by regulatory issues

28th September, 2011

In our continuing series, which examines the most robust routes between various global geographies using CAPA’s Route Analyser Tool, we will look at India in a more comprehensive way, showing that regulatory policy in India has actually moved its hubs to the Gulf states, primarily Dubai.

While there are a few additional Europe-South Asia routes (i.e. Pakistan, Sri Lanka) that meet the selected criteria, they have been eliminated from the analysis. What is left is a pattern that has two significant offers, between London and India’s two primary cities, followed by a robust, but much smaller offer, primarily originating in Germany. Following this, every service is essentially a single daily flight, most to either Delhi or Mumbai.

For a nation with many cities boasting a population in the millions, only six have non-stop connections to Europe.

European routes with more than 3000 seats per week: 26-Sep-2011 to 02-Oct-2011

1

LHR

London Heathrow

DEL

Delhi Indira Gandhi

26,174

2

LHR

London Heathrow

BOM

Mumbai

24,472

3

FRA

Frankfurt International

DEL

Delhi Indira Gandhi

8652

4

CDG

Paris Charles De Gaulle

DEL

Delhi Indira Gandhi

7182

5

FRA

Frankfurt International

BOM

Mumbai

5320

6

FRA

Frankfurt International

BLR

Bengaluru 

5320

8

MUC

Munich

DEL

Delhi Indira Gandhi

4522

10

AMS

Amsterdam Schiphol

DEL

Delhi Indira Gandhi

4116

11

IST

Istanbul Ataturk

BOM

Mumbai

4032

12

IST

Istanbul Ataturk

DEL

Delhi Indira Gandhi

4015

13

CDG

Paris Charles De Gaulle

BOM

Mumbai

3696

14

LHR

London Heathrow

BLR

Bengaluru

3430

15

FRA

Frankfurt International

MAA

Chennai

3360

16

ZRH

Zurich

BOM

Mumbai

3304

17

ZRH

Zurich

DEL

Delhi Indira Gandhi

3304

18

HEL

Helsinki-Vantaa

DEL

Delhi Indira Gandhi

3252

19

MXP

Milan Malpensa

DEL

Delhi Indira Gandhi

3150

20

BRU

Brussels

DEL

Delhi Indira Gandhi

3150

21

BRU

Brussels

BOM

Mumbai

3150

22

BRU

Brussels

MAA

Chennai

3150

24

MUC

Munich

BOM

Mumbai

3094

25

AMS

Amsterdam  Schiphol

BOM

Mumbai

3038

26

VIE

Vienna

DEL

Delhi Indira Gandhi

3024

Relatively limited connections – and variety – to Asia as well

Even more striking is the paucity of service between India and other expanding markets in Asia. On assessment of the top routes, it is evident there are even fewer Indian destinations, with Kolkata not represented.

Asia routes with more than 2000 weekly seats: 26-Sep-2011 to 02-Oct-2011

1

HKG

Hong Kong

DEL

Delhi Indira Gandhi

15,323

2

HKG

Hong Kong

BOM

Mumbai

11,676

3

NRT

Tokyo Narita

DEL

Delhi Indira Gandhi

4228

4

PVG

Shanghai Pudong

DEL

Delhi Indira Gandhi

4200

5

HKG

Hong Kong

BLR

Bengaluru

4186

8

HKG

Hong Kong

MAA

Chennai

2440

9

CAN

Guangzhou Baiyun

DEL

Delhi Indira Gandhi

2400

10

HGH

Hangzhou

DEL

Delhi Indira Gandhi 

2350

Asia routes with more than 10,000 weekly seats: 26-Sep-2011 to 02-Oct-2011

1

BKK

Bangkok Suvarnabhumi

DEL

Delhi Indira Gandhi

27,469

2

BKK

Bangkok Suvarnabhumi

BOM

Mumbai

19,426

3

SIN

Singapore Changi

MAA

Chennai

19,284

4

SIN

Singapore Changi

BOM

Mumbai

18,092

5

SIN

Singapore Changi

DEL

Delhi Indira Gandhi

15,092

The seat offer between Bangkok and Delhi would rank 12th, and between Hong Kong and Delhi would rank 21st, in comparison with routes between Southeast and North Asia. For a geography that is leading the world in growth and expansion, Indian routes are clearly not playing in the same league.

A decade of some progress, but lagging by comparison

But there has actually been significant progress. While seat counts a decade ago are difficult to retrieve, frequencies are not. The following graphs display the increase in frequencies on top 2011 routes in the 10 years since 2001.

Increase in weekly frequencies on key Europe-India routes: Sep-2001 to Sep-2011

Increase in weekly frequencies on key North Asia-India routes: Sep-2001 to Sep-2011

Increase in weekly frequencies on key Southeast Asia-India routes: Sep-2001 to Sep-2011

In 2001 there were 129 frequencies between Hong-Kong and Singapore, with 162 at present, or a 20% increase. Between Bangkok and Hong Kong the frequencies have risen by 16%, from 109 to 130.

In terms of percentages, routes to India have shown greater increase but from a smaller base. The frequency increase between Bangkok and Delhi is about 360% over the decade. But even at the 2011 levels, the route continues to be operated less often than others in the region.

"Find a need and fill it"

No place on earth has shown such devotion to this business adage like Dubai. There we have observed spectacular growth to India, not only in numbers of seats but also in destinations served. Unfortunately for India, the connecting point lies outside its borders.

Dubai-India routes with more than 5000 weekly seats: 26-Sep-2011 to 02-Oct-2011

1

DXB

BOM

Mumbai

35,422

3

DXB

DEL

Delhi Indira Gandhi

27,834

6

DXB

MAA

Chennai

17,290

7

DXB

HYD

Hyderabad Rajiv Gandhi

16,388

8

DXB

BLR

Bengaluru

12,866

11

DXB

CCJ

Kozhikode Calicut

11,100

12

DXB

COK

Kochi

11,080

18

DXB

TRV

Thiruvananthapuram  

8598

35

DXB

CCU

Kolkata Netaji Subhas Chandra

5952

47

DXB

AMD

Ahmedabad

5338

The seat offers from Dubai to Delhi and Mumbai each exceed the seats available between India and any other global point, including London, and there are 10 Indian destinations served directly from Dubai. A similar, but less imposing network is also available from Abu Dhabi on Emirates or from Doha on Qatar. Not only is there frequency, but also a wider choice of departure times for travellers.

Frequencies and aircraft, Gulf-India: Sep-2011

 

EK

EY

QR

Ahmedabad

10 X 332

 

7 X 321

Bengaluru

21 X 332

7 X 320

7 X 332

Chennai

7 X 332

7 X 320

7 X 332

 

14 X 777

   

Delhi

21 X 777

7 X 320

7 X 777

 

7 X 332

 

7 X 332

Goa

   

7 X 321

Hyderabad

21 X 332

7 X 320

7 X 321

Kochi

14 X 777

7 X 346

11 X 321

Kolkata

12 X 332

 

7 X 320

Kozhikode

5 X 777

3 X 320

7 X 320

 

6 X 332

   

Mumbai

21 X 777

7 X 320

7 X 777

 

14 X 332

   

Thiruvananthapuram

12 X 332

7 X 320

7 X 321

And to some Indian cities, like Thiruvananthapuram, they are virtually the only practical option. A passenger from New York could connect twice via Europe and India or make a single connection at Dubai. Plus, 35 of the 65 other international frequencies are operated by airlines also based in the Gulf – Air Arabia and Oman Air.

Other international service TRV

Dammam

9 X 737

Kuwait

4 X 310

Muscat

21 X 737*

Sharjah

14 X 320^

Sharjah

11 X 737/320

Singapore

6 X 320

India is perhaps most challenged from within

India continues to be a late bloomer, with much of that tardiness doubtlessly attributable to the regulatory environment which, after opening up rapidly between 2004 and 2008, is now once again limiting access in order to protect Air India. India’s carriers have steadily increased their share of international traffic since 2004, but they have largely expanded on routes with existing service rather than extending their network to new markets. All but one of the European services to cities other than Mumbai and Delhi are operated by non-Indian airlines and while Indian carriers compete on many of the Gulf sectors, they are, for lack of a broader network, generally limited to origin and destination traffic.

LCCs might have pursued more innovative route development strategies but until recently most have been prevented from operating overseas due to a regulation which first requires them to complete five years of domestic service. And now that strong carriers such as IndiGo have completed this qualification period, they are facing difficulties in securing traffic rights.

A renewed focus on shielding Air India has resulted in a freeze on new bilaterals and a reluctance to grant traffic rights to private Indian carriers. Aside from the impact on trade and tourism, India’s airlines may, as a result, be forced to deploy aircraft earmarked for international services on domestic routes – the additional capacity could destablise an already weak domestic sector. 

India’s international aviation market has great potential, supported by strong growth in disposable incomes that is driving outbound travel, increasing international trade and investment, and a wealth of attractions that should generate far more foreign tourist arrivals than the 5.6 million visitors recorded in 2010. But maximising this potential will require a much more holistic approach than one focussed on protecting the national carrier.

CAPA employs a leading team of writers and analysts positioned around the world. Find out more about CAPA's regional and global analysts.
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