In many ways what the government is nudging the Indian carriers to do is a natural progression and growth path for them. India now has world-class airports in a number of cities including even non-metros such as Ahmedabad and Kannur, which allow easy transfer of domestic passengers to international flights and vice-versa. However, at the moment, only Air India and Vistara have wide-body aircraft. This means that foreign carriers such as Emirates, Qatar Airways, Etihad, British Airways, United and Lufthansa, which operate wide-body aircraft are able to make full use of these mega airports that India has constructed.
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A large part of the domestic airlines’ fleet consists of narrow-body aircraft which allow them to fly for four-five hours on routes within India or to countries in South-East Asia such as Singapore, Thailand and Malaysia and in South Asia such as Nepal, Bhutan, Sri Lanka and Maldives.
Here IndiGo is an exception as it has more than eighty 321 NEOs which allow it to operate further up to Turkey, but even this type of aircraft cannot fly non-stop to London, the US, Canada, Australia, Africa and South America which means that traffic to and from India is carried by foreign carriers to these destinations.
This is working to Indian carriers’ disadvantage as it is estimated that only 36 per cent of international air traffic to India goes to Indian carriers, while over 60 per cent of the revenue generated on these routes goes into foreign hands.
Rémi Maillard, President, Airbus India and MD of its South Asia region, late last year said to MoneyControl, “There is no other country in the world where you have this (kind of) dominance of foreign carriers in international traffic. It is unique. If you take China, the US, Europe or all the big markets, you have a more balanced market share between local and international carriers."
Given this scenario, the government’s nudge to Indian carriers makes a lot of sense.
In a way, a small start to what the government is pitching to Indian carriers has been made. Air India recently signed a letter of intent for five second-hand Boeing 777-200 Long-Range aircraft. The B777-200LRs will join the fleet between December and March next year and will be deployed on routes from Indian metro cities to the US.
Similarly, Vistara is operating daily to London. In August, it also announced a 100 per cent increase to and from Frankfurt and Paris. This became possible as it received its third wide-body Boeing 787-9 aircraft, allowing it to fly such long distances.
There has also been talk of Air India looking to acquire the Airbus A-350 aircraft, and Vistara already has the wide-body Boeing 787-9. This will help the two Indian carriers make a mark on the international scene as these aircraft have a range of of 8,700 to 9,000 nautical miles and are capable of flying between the furthest points in the world, such as from Marrakesh to Auckland non-stop. From India the A-350-900 ULR can fly non-stop between Mumbai and Buenos Aires, Mumbai and Panama City (which if it is to be mounted will be the world’s longest flight), Delhi-Auckland or even connecting Thiruvananthapuram to Tel Aviv.
Given that Delhi, Mumbai and Bengaluru were counted among the top 50 international mega hub airports in September this year in a survey by travel data provider OAG, ordering and operating wide-body aircraft will make it possible to achieve the goal that the government has set before Indian carriers. In fact, Delhi was named as the largest mega-hub in the Asia-Pacific region followed by Haneda airport in Japan.
There could also be an economic spin-off if this is to happen. A recent study titled ‘Outbound travel and tourism – An opportunity untapped’ by Nangia Andersen LLP in association with Ficci states that outbound travel from India will surpass $42 billion by 2024 and that the government could make certain policy changes to boost this growing market.
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