Thursday, June 14, 2018

India airlines spread their wings to escape airfare war at home

Indian airlines are turning to the international market in search of better returns as the intensifying fight for a bigger share of the world’s fastest growing domestic market - where price is king - drives down profits.

While global airlines’ profits have been strong since 2015 - though with wide regional variations - Indian carriers are struggling to remain profitable, despite filling nearly 90 percent of their seats and benefiting from a more than doubling of domestic passenger numbers over the last four years.

“It is an incredibly tough domestic market, very price sensitive,” said Stephen Barnes, chief financial officer of Singapore Airlines which operates an Indian carrier, Vistara, in a joint venture with the Tata Group.

“Commanding a premium for a premium product is hard to do. From our perspective we invested in order to see the business grow internationally. If you look at the results of Indian airlines their performance is better internationally.”
13/06/18 Aditi Shah and Jamie Freed/Reuters

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