Tuesday, March 31, 2020

India’s air connection to China third time unlucky

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!

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.
31/03/20 Ameya Joshi/moneycontrol.com
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