Early this year, IndiGo – India’s largest carrier by fleet and market share – announced new flights connecting Mumbai to Chengdu. This would complement the airline’s operations to China; it already operated flights to Chengdu from New Delhi and to Guangzhou from Kolkata. In addition to mainland China, the airline operated flights to Hong Kong from Kolkata and Bengaluru. IndiGo was buoyant about its China operations and even started a call centre in Guangzhou.
Then came the crash – Coronavirus started impacting travel to/from China in January and soon swell into a global phenomenon. As of today, IndiGo -- like all other airlines in India -- is grounded. IndiGo was on a sprint to increase its international presence as was told by its top management in successive calls with investors and analysts post declaration of their quarterly results. It is déjà vu when it comes to India-China operations!
India – China operations
For a long period of time, there have been destinations where foreign carriers were successful and Indian carriers hardly ventured or failed. A good glimpse of this can be found in the utilisation of bilateral rights. The India-Malaysia bilateral had 100 percent utilisation by the Malaysian side and zero from Indian side, until IndiGo launched operations. It was the same story for Turkey as well. The story was more or less similar to China and a couple of places in the Middle East until a few years ago.
The India–China Air Services Agreement (ASA) allows 42 weekly services or 6 daily flights between the two countries. Hong Kong is not part of the ASA between India and China. Data for last year, before IndiGo launched operations, showed that Chinese carriers utilised 41 of those 42 services while Air India was the sole carrier to ply to China with five weekly services.
Previous attempts to China
While this time around it was COVID-19, the first time a private carrier tried mainland China was Jet Airways flying to Shanghai on its way to San Francisco. The airline was even allowed to fly passengers between Shanghai and San Francisco. Jet Airways started its China operations in June 2008, only to start withdrawing frequencies in November of the same year and withdrawing the route completely in January 2009 -- after operating for a little over seven months.
The economic crisis in 2008 and slowdown in travel industry along with US markets led to the cancellation of flights for Jet Airways. The airline had looked at increasing business traffic on the Shanghai–San Francisco route to select the intermediate point. The airline tried returning on the Mumbai–Shanghai market in 2016 but it never took off as the airline went from one problem to another and eventually suspended all operations last year, as it ran out of cash.
In 2013, SpiceJet became the only private carrier in the country to have operations to mainland China when it launched flights to Guangzhou from New Delhi. The flights were launched in February 2013 and coincided with the rising oil prices – a challenge for newer and longer routes. The flights to Guangzhou were pulled out in February 2014, barely a year into operations. The airline was battling headwinds due to higher oil prices and poor cash position. The airline went into deeper trouble by end of 2014 only to come out with the help of additional cash, sudden fall of oil and combination of other things.
Air India – the only player
While private carriers encountered challenges, internal and external, and couldn’t last long, the national carrier started flights to Shanghai in 2000 and since then has been operating to mainland China.
What is the secret sauce for Air India? There may not be one, because we don’t know if the route is profitable and if it is there could be many reasons like better distribution capabilities, a functional hub at New Delhi, diplomatic and government traffic preferring Air India amongst few.
In an uncanny resemblance of situations in these three cases, every Indian airline has had an internal or external roadblock within a year of launching operations to China! In the case of Air Sahara – the airline wanted to launch operations but was sold to rival Jet Airways, before it could!
Call it luck or rather the lack of it, China truly remains the final frontier for airlines in India after tasting success on domestic routes and abroad! When times change and the “new” normal sets in, it would be interesting to see how the trade with China is impacted and if IndiGo would go back to its planned frequency, leave aside adding flights and destinations in China in immediate future!Ameya Joshi runs the aviation analysis website Network Thoughts. Ameya writes a lot on aviation.