The Hindu : Front Page : Flyers set to gain as airlines vie for West Asian pie

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Sunday, Feb 10, 2008
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Flyers set to gain as airlines vie for West Asian pie

Ananth Krishnan

Two bilateral agreements with UAE, Bahrain signed this week have opened the doors for more operators

CHENNAI: There are already a dozen airlines that connect southern India with the Gulf countries, and more are now set to enter the picture. Two bilateral agreements signed this week between India and the governments of the United Arab Emirates and Bahrain have opened the doors for new airlines to enter the already crowded — and hugely profitable — skies between India and West Asia.

UAE-based Etihad Airways has acquired permission to introduce four new services to India and will begin daily flights from Chennai and Kozhikode to Abu Dhabi in March. The airline will also fly to Jaipur and Kolkata later in the year.

In another agreement ratified this week, the Bahrain-based Gulf Air got the green light from the Government of India to expand its Indian operations, acquiring rights to begin daily flights to Hyderabad and increase its services to Kochi and Kolkata to a daily frequency. This follows Jet Airways’ entry into the market in January, with the private carrier launching flights from Kochi, Kozhikode, Mumbai and New Delhi to Bahrain, Kuwait, Muscat and Doha.

Heavy traffic

What impact will the new entrants have on existing operators? The International Air Transport Association’s statistics suggest that airlines are likely to continue enjoying success on West Asian routes and that there is plenty more of the pie to go around.

West Asia was by far the largest destination for Indian international travellers last year, receiving more than one-third of outbound international traffic. The United Arab Emirates alone receives 16 per cent of all international traffic out of India — slightly more than 20 lakh travellers every year — which is almost as much as the combined traffic to the United States and the United Kingdom.

Air India has traditionally enjoyed a monopoly on these routes, with revenues on these sectors contributing to more than 30 per cent of its international takings. The high load factors it has consistently enjoyed have prompted the airline to continue adding flights to its already vast West Asian network — it operates 150 flights every week to the region, more than any other carrier — by introducing 11 services this year.

More choice

The entrance of new airlines into the market bodes well for air-travellers, says D. Sudhakara Reddy, president, Air Passengers’ Association of India. “Earlier, in the peak season in July, we used to receive major complaints that airlines like Air India were charging phenomenal sums of money,” he says. “But if you look at the fares now, they are very attractive even in the peak season. Passengers also have more choice in flight timings. You no longer have to fly in the middle of the night.”

Ajit Kumar, vice-president (marketing) of Hi-Tours, a travel agency, agrees. He however says more low cost carriers need to join the race if fares are to become more reasonable. “With the labour traffic, flights are going full,” he says. “They are cheaper and the situation with regard to seat availability and price structures has eased up.”

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