Foreign airlines gain at domestic carriers' cost on overseas routes

New Delhi: Cutbacks on international flights by domestic carriers are likely to see their market shares falling as foreign carriers gain from the lower utilisation of bilateral rights on key routes.
Recently, for example, Gulf carrier Emirates announced that from February 1, 2009, it would increase weekly flights from 132 to 163. By doing so, it will oust national carrier Air India, which along with Indian Airlines and its low-cost subsidiary Air India Express, has 150-odd weekly flights to Dubai.
Civil aviation ministry sources said Air India has already cut international capacity 20 per cent.
Jet Airways, India’s largest private airline, plans to cut international flights 19 per cent in the winter schedule, Delhi-Hong Kong among them. Meanwhile, Hong Kong carrier Cathay Pacific has seized the opportunity from increased bilaterals on the route to enhance weekly flights from eight at the start of this year to the current 24.
Among other examples, British Airways launched a daily flight from Hyderabad to London and five weekly flights between Bangalore and London.
Day before yesterday, Scandinavian Airlines launched a tri-weekly flight from India to Copenhagen.
Overall, Indian carriers are utilising less than 40 per cent of their bilateral air service agreement rights, and foreign carriers like Emirates will be utilising more than 70 per cent. Cathay Pacific already utilises 100 per cent of its rights.
Experts said the rejigging of schedules will impact the Indian carriers much more than the international carriers because they follow opposite strategies.
“All these international airlines depend on hub traffic and Indian carriers depend completely on point-to-point,” said Keyur Joshi, co-founder and COO of travel portal Makemytrip.
So, if Emirates has an indirect flight between Dubai and the US via India, only around 30 per cent of its revenues will come from the Dubai-India leg and the rest will come from the onward flight.
For Indian carriers like Jet Airways, most of the revenues come from India to a specific destination and not from an onward flight.
03/11/08 Anirban Chowdhury/Business Standard

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Categories: Foreign Nov 2008, Indian Aviation- In General Nov 2008