All the airlines have aggressively expanded wings in the international market. Hopefully, this will be enough to arrest the slowdown in international traffic to and from India
International travel to and from India may have declined, but that hasn't stopped domestic airlines to expand their services in the international market.
Before it suspended operations in April, Jet Airways had the highest market share in the international market. But the fact that it was losing share from January itself is clear from numbers published by industry regulator DGCA.
In the first three months of 2018, Jet Airways alone had flown more than two million passengers in and out of India. Air India was second, with about 1.6 million passengers. IndiGo flew less than a million.
A year later, the pecking order had changed. Air India had become the biggest flier of international traffic, its 1.7 million passengers is about a lakh higher than what Jet Airways flew. IndiGo's traffic increased by almost half to nearly 1.5 million passengers.
IndiGo is sure to build on that momentum in coming quarters The largest airline in the country has been feverishly announcing new flights in international routes. In July, IndiGo announced additional flights to Dubai and launched new services to Hanoi (Vietnam), Singapore, Bangkok, Jeddah and Kuwait. A month earlier, it had started maiden flight services to China.
Interestingly, both China and Vietnam markets were first operated by Jet Airways, which had later vacated both routes.
"Expansion is completely based on availability of aircraft as rights were given in accordance with their current size. IndiGo has a large fleet and that helps it start operations on these routes quickly as aircraft can be made available by rejigging the current network," Vinamra Longani, a Delhi-based aviation consultant, saidDistribution of rights
In July, the government had distributed Jet Airways' bilateral rights to other airlines. As per reports, the lion's share went to Air India. IndiGo bagged the highest with 84 flights a week, SpiceJet 77, GoAir 35 and Vistara 28.
Apart from the rights, airport slots belonging to Jet Airways were also distributed. IndiGo received 12 slots for international departures. Of this, the airline has started using seven of the slots, and planned to take up the rest later, a senior official had said in July after its Q1 result.
"For all airlines this is an opportunity to grow their regional footprint. Overseas routes bring in forex, which is critical for Indian airlines as three-fourth of costs are in dollar terms," Longani added.
Among other airlines, Vistara and GoAir have also used the opportunity to expand overseas. Vistara will be launching its maiden international service on August 5 by flying to Singapore from Delhi. Two days later, it will connect the international destination from Mumbai.
Vistara will fly its Boeing 737-800NG aircraft with two-class cabin configuration (business and economy) to Singapore. These aircraft were earlier used by Jet Airways.
The joint venture between Tata Sons and Singapore Airlines also announced Dubai as its second international destination starting August 21. On August 5, Vistara said it expanded the scope of its codeshare partnership with Singapore Airlines and SilkAir to include 40 international destinations.
Joining the party is GoAir, which has otherwise been conservative on its network expansion. In July, the airline announced new international services to Abu Dhabi, Bangkok, Dubai, Muscat and Kuwait.
SpiceJet, on the other hand, has been relatively silent. Despite launching three international routes in June -- Dhaka, Riyadh and Hong Kong -- the airline has gone quite on its overseas expansion. "They have had a couple of aircraft taken out of service due to incidents. This has affected their ability to launch flights," Longani said.SlowdownThe overseas expansion is expected to continue, especially with the festive season about to start within a month.
But that doesn't take away from the slowdown that seems to be creeping in. According to a report by IANS, international air traffic grew at just 3.8 percent in the first three months of the calendar year: the slowest in four years.It will be interesting to see if the aggressive international expansion fuels the growth rate in coming quarters.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.