Jet Air to increase connectivity to Singapore http://www.thehindubusinessline.com/industry-and-economy/logistics/jet-air-to-increase-connectivity-to-singapore/article4905578.ece
Air India goes back to Australia after a gap of 16 years. Meanwhile, Qantas has been into and out of India often, finally stopping all services to India in May 2012.
Why this flip flop for operating to Australia. Because of Air India's past experience. Operations to Australia have never been profitable for Air India. Earlier, its traffic profile was largely 6th freedom, comprising predominantly of passengers travelling between Australia and Beirut, Malta, Rome, Cairo and to a small extent London.
However this time Air India embarks on this operation, with two positive premises. One, the Indian ethnic population in Australia ( incl. students) has almost quadrupled, from what it was 16 years ago, thereby ensuring a comparatively larger component of end to end India Australia traffic, and thus better yields. Second, a fuel efficient B-787 aircraft that will ensure a better cost economics of operation.
Despite these positives, this market is notoriously ' price sensitive ' and low yield. It comprises chiefly of VFR (Visiting Friends & Relatives ) traffic and student traffic- both highly price conscious. The only way, if at all, to sustain this price factor, is to have a steady year round passenger load of above 85%.
For this Air India, had sought a code share with Qantas, for a deeper and wider penetration in the Australian hinterland ( refer Chocks-on issue IV of 06 July ), but Qantas turned it down on the plea that it already has a code with Jet-Airways, over Singapore to Sydney, Melbourne, Brisbane and Perth.
Now we understand that Jet Airways, w.e.f. 01 Aug., 2013 is launching a second daily flight to Singapore from Chennai. Jet Airways already operates 2 daily flights to Singapore from Delhi, one from Mumbai and now two from Chennai.
Secondly, India Australia traffic was the main bread and butter of Singapore Airlines, which commanded a lions share of the Australian traffic from the sub-continent to Australia. It is obvious Singapore Airlines will give a tough challenge to Air India to poach into its traditional turf. Singapore Airlines and its subsidiary Silk Air already have a wide footprint in India of 11 gateways and 98 direct weekly flights. Tiger Airways, which is 39% owned by SQ, operates 39 weekly flights from 6 Indian gateways. This wide combined network in India of Singapore Airlines and its subsidiaries, gives it a phenomenal strength to determine market swings. Like in India, Singapore Airlines has a formidable network and footprint in Australia as well. It will be a bitter battle for Air India to divert traffic from Singapore Airlines. Fare wars are a foregone conclusion.
Added to this is the LCC, Air Asia, which is currently operating from 5 Indian gateways to Kuala Lumpur. From Kuala Lumpur, Air Asia X operates a long haul daily LCC service to Queens land. According to CAPA ( Center for Asia Pacific Aviation ) Air Asia X will have more seats to Australia, than Malaysian Airlines- it plans to increase seat capacity by more than 40%, from the existing 26,400 to 37,000 per week. Once Air Asia India commences operations, one can well imagine the fare war unleashed on the India Australia route.
The above are just some of the broad contours of the competition Air India will face on the India Australia run.
Will history again repeat itself for Air India ? Only time will tell.
Our Credo….”Network& Be Informed “
Air India goes back to Australia after a gap of 16 years. Meanwhile, Qantas has been into and out of India often, finally stopping all services to India in May 2012.
Why this flip flop for operating to Australia. Because of Air India's past experience. Operations to Australia have never been profitable for Air India. Earlier, its traffic profile was largely 6th freedom, comprising predominantly of passengers travelling between Australia and Beirut, Malta, Rome, Cairo and to a small extent London.
However this time Air India embarks on this operation, with two positive premises. One, the Indian ethnic population in Australia ( incl. students) has almost quadrupled, from what it was 16 years ago, thereby ensuring a comparatively larger component of end to end India Australia traffic, and thus better yields. Second, a fuel efficient B-787 aircraft that will ensure a better cost economics of operation.
Despite these positives, this market is notoriously ' price sensitive ' and low yield. It comprises chiefly of VFR (Visiting Friends & Relatives ) traffic and student traffic- both highly price conscious. The only way, if at all, to sustain this price factor, is to have a steady year round passenger load of above 85%.
For this Air India, had sought a code share with Qantas, for a deeper and wider penetration in the Australian hinterland ( refer Chocks-on issue IV of 06 July ), but Qantas turned it down on the plea that it already has a code with Jet-Airways, over Singapore to Sydney, Melbourne, Brisbane and Perth.
Now we understand that Jet Airways, w.e.f. 01 Aug., 2013 is launching a second daily flight to Singapore from Chennai. Jet Airways already operates 2 daily flights to Singapore from Delhi, one from Mumbai and now two from Chennai.
Secondly, India Australia traffic was the main bread and butter of Singapore Airlines, which commanded a lions share of the Australian traffic from the sub-continent to Australia. It is obvious Singapore Airlines will give a tough challenge to Air India to poach into its traditional turf. Singapore Airlines and its subsidiary Silk Air already have a wide footprint in India of 11 gateways and 98 direct weekly flights. Tiger Airways, which is 39% owned by SQ, operates 39 weekly flights from 6 Indian gateways. This wide combined network in India of Singapore Airlines and its subsidiaries, gives it a phenomenal strength to determine market swings. Like in India, Singapore Airlines has a formidable network and footprint in Australia as well. It will be a bitter battle for Air India to divert traffic from Singapore Airlines. Fare wars are a foregone conclusion.
Added to this is the LCC, Air Asia, which is currently operating from 5 Indian gateways to Kuala Lumpur. From Kuala Lumpur, Air Asia X operates a long haul daily LCC service to Queens land. According to CAPA ( Center for Asia Pacific Aviation ) Air Asia X will have more seats to Australia, than Malaysian Airlines- it plans to increase seat capacity by more than 40%, from the existing 26,400 to 37,000 per week. Once Air Asia India commences operations, one can well imagine the fare war unleashed on the India Australia route.
The above are just some of the broad contours of the competition Air India will face on the India Australia run.
Will history again repeat itself for Air India ? Only time will tell.
Our Credo….”Network& Be Informed “
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