Why Jet Air, SpiceJet want to spread wings in Gulf skies

Moneycontrol Bureau

Jet Airways has just added four additional flights on the Mumbai-Kuwait sector in addition to its existing daily services on the network. The carrier said it wants to expand more in the Gulf region where it already flies to almost all destinations including Abu Dhabi, Sharjah, Oman and Bahrain.

Simultaneously, IndiGo which got permission to fly international last year also chose to pick Delhi-Dubai as its maiden international flight and SpiceJet which had applied to the regulator to fly on the same route has just got permission for the same.

Air India which is a veteran on the sector is operating to Sharjah, Abu Dhabi, Bahrain and Dubai despite its pilots striking work since a month.

Why are all these carriers so bullish on the Gulf sector? Find out

 Better yields
*The region is short haul just like any other domestic destination but gives much better returns. For instance, a Mumbai-Dubai or a Delhi- Kuwait flight is around 2.5 hours long, just like any other domestic flight between metro cities, but there is a huge difference in pricing. A Mumbai-Delhi fare will cost you Rs 10,000 maximum for a one-way journey, but in the case of an international flight covering the same distance, the fare will be almost Rs 20,000 as per fare details given on travel portals.

*Revenue driver
"The  region accounts for over 30% of international traffic from India and for Air India alone, around 40% (Rs 10,000)  revenue come from the Gulf sector," said an AI official. 

*High occupancy
"Flights operate on 100% occupancy due to a large number of Indian people working in Dubai, Oman, Qatar and Saudi Arabia. Despite around 15 carriers (including international airlines) are altogether offering 2.5 lakh seats on the sector, yet the space is not cluttered and each airline is trying to increase capacities," says Subhash Goyal, chairman of SITI, a travel services company.