Meeting demand in India

29 July 2004

India's new middle classes are swelling in numbers, wealth and ambition. And they want to travel. India's skies so long dominated by monolithic Air India and Indian Airlines have changed over the last few years with the entry of new domestic carriers such as Sahara and Jet Airways. They have modern fleets, young crews and ambitious plans. But they were limited to domestic routes and restricted by antiquated airports and infrastructure.

Now India’s aviation market is changing again as private domestic carriers look set to receive rights to operate to ASEAN destinations before the end of the year and possibly to Europe and North America in 2005.

In addition, Indian Airlines and Air India could receive their long awaited recapitalisation to help them expand their fleets. But the make-up of the state-owned carriers’ fleets will probably be much different than originally envisaged, comprising many more long haul aircraft. Indian Airlines will join Air India, in opening up international markets. The result will be significantly enhanced capacity – and a much greater utilisation of India’s unused bilateral rights. This in turn could trigger a fresh round of liberalisation. This has already been flagged in upcoming bilateral negotiations with the UK. 

The domestic environment will change dramatically over the next few months as low cost airlines take to the skies. This new breed of domestic carriers will target first time flyers with low fares and a business model that is becoming increasingly familiar in Asia. Kingfisher, a low cost airline offshoot from brewer, UB Group, has signed an MoU for up to 12 A320s, becoming the first of the new wave of Indian low cost entrants to announce fleet plans. The aircraft, to be delivered in stages from January 2005, will be based at Bangalore. Air India will launch Air India Express in April 2005 and Jet Airways meanwhile, is understood to be considering plans to establish its own low cost subsidiary. Indian Airlines may relaunch Alliance Air as a low cost operation, while Air Sahara is still considering its response.

Air Deccan – India’s first low cost entrant – is increasing its ATR fleet, and preparing to launch A320 services on major metropolitan routes within two weeks.

The real issue for India will be the impact on India’s creaking airport infrastructure. Significant investment in new and expanded facilities is essential to ensure the potential traffic boom is not stifled. In China there are new airports and terminals being built across the nation at a rapid pace. India still has much catching up to do. 

Kingfisher Airlines

India's leading fashion designers will style aircraft interiors and flight attendants will be chosen during a Kingfisher flying model contest to be launched all over India. The airline will begin operations on May 9th 2005. The Bangalore based company has signed a preliminary deal with Airbus to acquire 12 A-320 aircraft.

Air Deccan.

Describing itself as India's first low cost airline with a fleet of ATR- 42 turboprops Air Deccan will launch jet service in August wit 3 Airbus A320s. Deccan has also appointed to its Board of Directors, Mr Vijay Amritraj, India's best known Tennis star and Star TV anchor.

SpiceJet

The reincarnation of Modiluft which ceased operations in 1996; which begat Royal Airways which begat SpiceJet. Wait and see if this one flies.

Jet Airways (not an LCC)

Flying to 44 destinations with a fleet of 41 planes Jet Airways is now a major full service carrier and has added international flights to Sri Lanka and Nepal. The airline is expanding into SE Asia.

Air India Express

Air India's response to the new LCCs.