Moneycontrol Be a Pro
Get App
Last Updated : Nov 25, 2019 11:39 AM IST | Source: Moneycontrol.com

The Gulf race: Indian airlines line up partnerships, new services to garner market share in the region

IndiGo and SpiceJet have taken the lead to fill the void left by Jet Airways. In the process, fliers benefit as fares fall

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Intense competition has ensued among Indian carriers, especially between IndiGo (InterGlobe Aviation) and SpiceJet, in the Middle East market as all of them look to corner the space vacated by Jet Airways.

In the process, the biggest beneficiaries could be the fliers who were otherwise facing the brunt of high fares after the Naresh Goyal-founded airline suspended operations in April. Now, with other airlines aggressively adding flights to Dubai, Abu Dhabi and other destinations in the region, fares have climbed down.

Among the most aggressive have been IndiGo and SpiceJet. The former recently signed a code share agreement with Qatar Airways, which will allow the Indian airline add more passengers on its flights between Indian cities and Doha. The Indian cities connected under the agreement are Delhi, Mumbai and Hyderabad. Just before signing the partnership, it had increased frequency to Doha from Chennai and Delhi.

Close

Apart from these, the year has seen the airline adding flights to Dubai, Abu Dhabi and Jeddah in Saudi Arabia. IndiGo, which also flies to Riyadh in Saudi Arabia, has indicated that it will further expand services in the country next year.

The announcement came after India and Saudi Arabia agreed to increase weekly capacities between the two countries to 50,000 seats. This will be a near 80 percent increase in seats.

In the first phase, the seats available will expand to 36,000, 44,000 in the second and eventually to 50,000 seats in the third phase.

IndiGo's expansion to the region had begun in December last year, when it signed a code share agreement with Turkish Airlines. The agreement will enable its customers to fly to destinations in Europe from the latter's hub in Istanbul.

SpiceJet's push

The Ajay Singh-led airline had two important announcements regarding its Middle East push.

First, it signed an MoU with Bahrain's Gulf Air, which gives it a wider scope that includes code share agreement, cargo services and pilot training.

More ambitious is SpiceJet's plan to start a joint venture in Ras Al Khaimah (RAK), one of the seven emirates of the UAE. This is a first for an Indian airline.

The Emirate, unlike the others such as Dubai and Abu Dhabi, doesn't have its own airline. At present, only Air India Express flies to the RAK. SpiceJet plans to start services and then a local airline in 2020.

SpiceJet already has a code share agreement with Emirates in place. This was signed in April. Under this, SpiceJet fliers from about 50 Indian destinations and can make use of Emirates's network beyond the Middle East.

The airline plans to use Boeing's 737 Max aircraft, which are at present grounded globally, for its regional push.

Jet's suspension and fares

At its peak, Jet Airways commanded over one-third of the Middle East market, with its flights dominating traffic between India and destinations in the region. It also helped that Etihad Airways had a 24 percent stake in Jet Airways, adding to the latter's numbers.

Fares immediately spiked, by more than double, after Jet Airways suspended operations. The impact was especially telling on services to the UAE airports.

But since then, the fares have come down as the two Indian airlines and later GoAir kept adding services, thereby increasing capacity. The airline, owned by the Wadia family, has launched direct flights to Dubai, Muscat and Abu Dhabi.

LIVE NOW... Video series on How to Double Your Monthly Income... where Rahul Shah, Ex-Swiss Investment Banker and one of India's leading experts on wealth building, reveals his secret strategies for the first time ever. Register here to watch it for FREE.
First Published on Nov 25, 2019 11:39 am
Loading...
Follow us on
Available On