Indian carriers not even carrying half the international traffic from India

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Directorate General of Civil Aviation (DGCA) data on international traffic in the January-March quarter of 2023 threw up some interesting numbers. Indian carriers had a share of 43.86 percent of International traffic to and from India during the quarter.

This definitely is better than Q4-CY19, the last full quarter before the onset of COVID, when Indian carriers had a 39.2 percent share. That quarter was impacted by the loss of Jet Airways’ capacity. The airline had a sizable international presence and shut down in April 2019. In Q4 - CY18, Indian carriers had 40 percent of international traffic from and to India.

This was the fourth quarter after international services resumed in India post the COVID shutdown with traffic coming very close to pre-COVID levels. Traffic shifting towards Indian carriers is a good sign for the aviation industry in India, especially at a time when Air India has signed an MoU for a large deal with both Airbus and Boeing planes and IndiGo has time and again mentioned how it wants to focus more on international.

International traffic: Indian and Foreign carriers

Top 10 airlines

IndiGo continues to be the largest carrier ferrying international passengers in and out of India. The airline had 15.79 percent share in Q1 of 2023. It was followed by Air India at 12.6 percent. Interestingly, Emirates, which has been at the forefront of lobbying for more seats to India, was third and carried 9.21 percent of all traffic.

Air India Express, the low cost arm of Air India, which will also absorb AirAsia India by November this year, was fourth with 7.4 percent. This could go up significantly as the airline has only 24 aircraft and many more inductions are planned starting later this year. Singapore Airlines, which will have a 25.1 percent stake in Air India next March, stood fifth at 3.54 percent.

SpiceJet and Vistara were the other Indian carriers in the top 10 and stood in the seventh and eighth position. The West Asian trio of Qatar Airways (sixth), Air Arabia (ninth) and Etihad (tenth) completed the top 10 airlines carrying international traffic to and from India.

These 10 airlines catered to over 63 percent of the total international traffic in India.

Top 10 airlines catering to International traffic from and to India

Significance for Indian carriers

Indian carriers have always struggled to expand to foreign shores. Air India’s legacy flights to North America saw a good jump, with support from flights to Europe as well, once the Dreamliner inductions started. The Tata group’s takeover has seen the airline further expand with short-term leases after which the aircraft on order would start entering its fleet and help it expand further.

Air India had 24,353 domestic departures in Q1, and 10,350 international departures. This was significantly lower than IndiGo’s 1,43,271 domestic and 14,382 international departures. In terms of capacity deployed by ASK (Available Seat Kilometre), Air India trumped IndiGo due to its long flights.

IndiGo deployed 23,384.54 million ASK on domestic services while 6,967.52 million on international as compared to Air India’s 4,020.90 million on domestic and 12.72 million on international.

With Go FIRST suspending operations, SpiceJet battling aircraft repossession and a financial crunch, Vistara merging with Air India, and Akasa awaiting further deliveries to start International services, Air India and IndiGo remain the torch-bearers from the Indian side for international traffic

Emirates

Recently, Emirates was in the news for pushing for more flights to India. The Air Services Agreement between India and the UAE allows 65,000 seats per week each way. The airline has consistently been third in terms of traffic carried. With Indian carriers attracting more passengers and taking their share up, it is no wonder that Emirates wants a larger slice of the pie. The airline recently declared its highest profit ever. And with its scale and size, while the India market is important, the airline is no more dependent on it for profits, leave aside survival.

Tail Note

Not just emirates but also the likes of Qatar Airways, Etihad and Singapore Airlines, which are all in the top 10, use their hubs to connect traffic from India to the world. With Indian traffic growing, there will be interesting permutations and combinations that could come up.

If the traffic grows in sync with capacity deployed by Indian carriers, it will mean no-impact growth for everyone. But if the Indian carriers deploy capacity that is above the growth rate of international travel and manage to take away passengers from foreign carriers, it may result in undercutting and a price war. The last scenario would be scary if there is a slump in passengers and an increase in capacity.