Air India Express

Singapore Airlines Group and Changi Airport to benefit as India-Singapore market opens up further

The Singapore-India market is poised for a modest increase in capacity, driven by further expansion from the Singapore Airlines (SIA) Group made possible by the recent signing of an expanded bilateral between the two countries.

The updated air services agreement only increases the previous capacity allotment for Singapore-based carriers by 10%. But SIA will take whatever it can get as Singapore-India is an important and generally under-served market. Incremental increases are typical with the India-Singapore bilateral, which has been updated several times in recent years, although Singapore would prefer a much bigger and broader agreement.

SIA along with full-service subsidiary SilkAir and low-cost carrier affiliate Tiger Airways already account for over 70% of capacity between India and Singapore. Indian carriers do not require a revised bilateral as they were using less than 40% of the prior allotment. Indian carriers over the last year have seen their share of the market decrease and may see their share drop further by the end of 2013 as the SIA Group again boosts capacity to India.

Air India Outlook: a business model beleaguered on all fronts

In this second extract from the CAPA India Aviation Outlook 2013/14 we look at the growing challenges to flag carrier Air India’s business model.

A combination of stronger Indian competitors as a result of foreign airline investment, the growth of LCCs, the opening up of the international market in the form of bilateral liberalisation and the changing nature of global alliances, will impact each of the three key areas of Air India’s operations – long-haul international, regional international and domestic – each of which we will consider in turn below.

Fatigue risk management rules challenge LCC cost reductions as safety issues are constantly reviewed

Low-cost airlines have increasingly scheduled back-of-the-clock flights departing late at night or early in the morning, but regulators are now placing greater emphasis on new issues in pilot fatigue risk management. That in turn is seeing some airlines lose operational advantages and incur a higher cost base, even if arguably justified on safety grounds.

New regulations from India’s Directorate General of Civil Aviation (DGCA) are impacting Air India’s LCC subsidiary, Air India Express. Previously the DGCA’s duty limitations did not differentiate between when duty time was occurring, but now the country’s pilots will be limited to seven-hour duty times instead of nine hours if the duty is for back-of-the-clock flights (officially the window of circadian low, occurring between 02:00 and 06:00). The ruling is applicable for domestic and regional flights.

India's domestic aviation market shows rapid growth in first half

On the surface, India's aviation industry looks to be in rude health, but behind the strong headline traffic figures is growing financial pain. India's airlines reported continued strong domestic passenger growth of 22.3% in Jul-2011 following on from an 18% expansion in the first half of the year. India is now the ninth largest and fastest growing domestic market in the world. The Indian government anticipates that India would become one of the three largest markets in the world by 2020.

IndiGo launches international services - targets 15% of seats in this segment by Mar-2012

IndiGo commences its much-anticipated international air services today (01-Sep-2011) after completing the mandatory five years of wholly domestic operations. The LCC, the largest in the domestic Indian market, marks the start of its foray into international markets with direct service to Dubai, followed by Singapore and Bangkok in the first phase - all key global business hubs.