As airlines chart out expansion plans, it is time to fill the air gaps

About two percent of India’s total exports are to Indonesia, yet there has not been any direct connectivity between the two countries.

On August 7, IndiGo operated its maiden non-stop flight to Indonesia’s capital Jakarta from India’s financial capital, Mumbai. Later this week, Batik Air Indonesia will start flights between Medan and Chennai. For two countries as large as India and Indonesia, which have traditional bonds and growing trade, it is surprising that the connectivity has thus far been lacklustre to say the least.

Indonesia ranks seventh in imports for India and 4.02 percent of our India’s imports are from Indonesia. About two percent of India’s total exports are to Indonesia, yet there has not been any direct connectivity between the two countries.

As both IndiGo and airlines part of the Air India group have publicly stated that international expansion is their focus area going forward, the immediate links could be those where trade is high but connectivity low.

A look at the trade numbers

A look at the data released by the Ministry of Commerce for the top 10 countries India imports from and exports to, shows that there are six countries which are present in both lists. These include the United States of America, UAE, China, Singapore, Saudi Arabia and Indonesia. In addition, the list of top countries where India exports includes the Netherlands, Bangladesh, the UK and Germany, while the countries from which India imports include Russia, South Korea, Iraq and Australia.

How does it translate to connectivity?

Data shared by OAG Aviation exclusively for this article shows that there isn’t much of a correlation between the quantum of trade and connectivity. For example, there are 18,051 weekly seats each way between India and the United States, but 1,31,418 seats between India and Dubai alone. When all airports in the UAE are clubbed, the seats on offer per week rise to 2,27,193 each way! Singapore, on the other hand, sees 55,922 seats each way per week. Between India and Saudi Arabia, there are 55,683 weekly seats each way.

Trade is just one part of the traffic driver, there are other aspects as well. The migrant population in the Middle East, a large number from South India, is a major driver of connectivity between the two countries. Then there are the middle eastern airlines who have considerable presence in India to feed their global network and work on a mix of superior products and lack of direct flights by Indian carriers.

Impact on bilaterals?

International flights are governed by Bilateral Air Services Agreement (BASA).While the United States and India have an open skies agreement, the one between India and the UK is restricted by frequencies while that between India and Dubai is restricted by seats per week.

Over the years, multiple countries have requested additional seats and India has time and again pushed back demands, focusing instead on giving room to the local carriers to grow.

Among the top 10 importing and exporting countries, the Indian carriers do not fly to Russia and Iraq while connectivity to Indonesia has just started. As Air India starts receiving planes from its mega order and IndiGo charts its expansion path, are these the blanks which will get filled up?