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Last Updated : Oct 23, 2020 04:39 PM IST | Source: Moneycontrol.com

Air India raises its London game like never before this winter

The state-owned airline will fly to London from eight Indian cities from January 1, probably for the first time ever.

Air India (Commons)
Air India (Commons)

One may not associate the aggressiveness with the state carrier, but Air India has surely taken the lead when it comes to operating on one of the busiest international routes this winter.

The airline will fly to London from eight Indian cities, starting January 1. These include Kochi and Goa. While Air India had started services from the two popular tourist destinations - Kochi in August and Goa from mid-October  - this is the first time they feature in the carrier's winter schedule.

The Kochi service began as part of the Vande Bharat repatriate exercise.

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While the main hubs of Delhi and Mumbai continue to feature in Air India's schedule, others include Amritsar, Kolkata, Ahmedabad and Bengaluru.

"It is very radical and innovative, in several ways. It illustrates the saying 'never let a serious crisis go to waste,'" says Craig Jenks, President and Founder, Airline/Aircraft Projects, a consultancy based in New York.

Air India surely is. While it had the monopoly over Vande Bharat Mission flights when the repatriation exercise took off, the airline continues to be the dominant player in bagging rights under the air travel bubble arrangement. At present, India has these arrangements with 18 countries, with Bangladesh and Ukraine being the latest additions.

Now the national airline wants to dominate the London route, not just from the hubs of Delhi and Mumbai, but also from the smaller cities.

"For decades, Air India could not / would not do most of these routes. Because their connecting hubs were/are in Mumbai and more recently, much more in Delhi," points out Jenks. The practice was to feed the hubs of Delhi and Mumbai with traffic from smaller cities through domestic flights.

The additional connections will make up for the loss on business travel, especially on the Mumbai-London route, and cater to the pent-up demand from Indian expats. It helps that on October 22, the government further relaxed restrictions on visa, including those for OCI and PIO cardholders.

Jenks said for decades, Air India was serving the rest of India to London by connecting passengers via Mumbai or Delhi. “This was not popular with passengers.” But now the airline is looking to serve expats (Ahmedabad and Amritsar) and tourists (Goa and Kochi) by introducing new routes, according to him.

air inda table

Air India's timing could turn out to be perfect if one goes by the loads on the flights to London. Though overall the load still around 45 percent, executives of the airline told Moneycontrol, on condition of anonymity, that recent flights from Delhi and Mumbai have seen loads inching towards, over the 70 percent mark.

"Loads are good. For one flight on October 24, only two seats are vacant in economy," a senior executive said. "People will start traveling as we get into the peak festival season and closer to the New Year," added another executive.

London, where British Indians make up for 6 percent of the population, is the most popular entry point to the country. London, where British Indians make up 6 percent of the population, is the most popular entry point to the country.

Industry experts reckon loads of over 70 to 80 percent are needed for a flight to break even. Ticket rates and fuel prices are huge factors, and it helps that rates of air turbine fuel have seen multiple corrections.

London calling for competition too

India is the 16th biggest travel market for the UK, with about 7 lakh Indian visitors every year. They are even bigger spenders, ranking 11th and spent 753 million pounds in the UK in 2019. There was a growth of 19 percent in arrivals from India, obviously helped by the 1.5 million Indian diaspora in the UK.

London, where British Indians make up for 6 percent of the population, is the most popular entry point to the country. The British capital takes up for majority of the 156 departures and 26,000 seats that the two countries have every week, according to their air bilateral.

But Air India will have to contend with competition, and the fear of excess capacity.

From November 21, Vistara will increase its weekly frequency from the current four to five flights. This will further rise to seven flights from December 1. SpiceJet will launch non-stop flights connecting Delhi and Mumbai with London’s Heathrow airport from December 4.

And UK carriers, Virgin Atlantic and British Airways are also ramping up services during the winter.

"There is indeed too much capacity given lockdown, visa, and quarantine restrictions on both ends. Demand on the flights has been fairly one-directional as well, into London from India, and flights routinely operate with less than 100 passengers on 300-seat aircraft,"  says Sanjiv Kapoor, former head of strategy and commercial operations at Vistara.

"However, for the December peak it may work for in-bound NRI passengers making their annual trip to visit aging parents, family, and relatives, despite all of the restrictions. And in January they will return to the UK. But after that I expect demand to fall back again," adds Kapoor.

The AI strategy

Will Air India's plan to directly pick passengers from the hitherto feeder destinations do enough to overcome the competition; especially, since all the other airlines are mostly operating non-stops from Mumbai and Delhi?

It may work.

"During peak season, this will help Air India free up those seats for Delhi passengers that were earlier taken by those from Amritsar. Same with Ahmedabad and Mumbai," says a senior travel industry official.

In Ahmedabad, customers are beginning to make inquiries. "Yes, more customers are calling. Out of 10, six or seven confirm the bookings. The bookings at present are at 20-25 percent of the pre-COVID-19 levels," says Ankit Bajaj, Director, at the city's Chiky Travels. Air India used to operate direct flights from the Gujarat city before the pandemic struck.

The bet on Goa could turn out to be the real winner. The tourist destination is especially popular with the British, who flock to Goa's sunny beaches as winter sets in across the UK. "Goa is buzzing at the moment with tourists coming back. While at present most of them are domestic, international arrivals are expected to get better," says Ajay Prakash of the Mumbai-based Nomad Travels.

It also matters that Thomas Cook, which used to operate charters during the season between London and Goa, has folded and so as its Thomas Cook Airlines. The airline used to operate flights from London's Gatwick and Manchester airports to Goa.

The visa hitch

Does Air India's aggressiveness means that the government may soon relax restrictions on tourist visa too?

The travel industry veteran quoted above points out to a possible loophole in the latest announcement on visa relaxation. "There is a line that possibly allows those with expired visas to apply," says the executive.

While one will have to wait for official word on tourist visa, it is clear that Air India is going aggressive.  As Jenks points out, the airline has never operated on all these routes at once. Will the new mojo help Air India attract more suitors for its divestment, irrespective of the delays?
First Published on Oct 23, 2020 02:23 pm
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