Monday, August 31, 2020

US Carriers Have Had A Tough Time Flying To India In The Past

Delta’s recent announcement that it is axing the new JFK-Mumbai route is a reminder of the tough times US carriers have had in India. With American delaying its Seattle-Bangalore route, United remains the only carrier serving India. So why do US carrier struggle in India, despite the massive demand?
The last time all three of the big US carriers were flying direct to India was in 2008, with airlines taking advantage of their new 777s for the route. The three carriers served different routes, hoping to generate traffic on the non-stop flights. However, both Delta and American dropped their routes in the next few years, citing overall losses and the low yield on the routes.
But India is a massive market for travel to the US. Over 1.4 million passengers visited the US from India last year, with that number rising in the previous decade. With such high demand, it’s surprising that US carriers were unable to fill their daily services.
Before jumping into why US carriers struggle in India, it should be noted that both Delta and American have also faced non-market issues. American cut its Chicago flight during bankruptcy in 2012, canceling all non-profitable routes. Delta also canceled its Mumbai flight during the global financial crisis, citing fewer passengers and cost cuts.
The main reason for the tough time US carriers face is intense competition, both from the Middle East Three (ME3) and, more recently, European carriers. These hub airlines can offer more connections and lower fares, attracting passengers from around the country.
The ME3 have been successful mainly due to their reach within India. Qatar flies to 13 Indian cities while Emirates flies to 9, allowing them both to access more population centers and remove the need for domestic connections. Combining this with lower fares enable these carriers to thrive in the notoriously price-sensitive market.
31/08/20 Pranjal Pande/Simple Flying
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