TravTalk India Online Magazine
Gavin Eccles, Managing Partner, GE Consulting & Advisory, says the new aircraft orders from Air India and IndiGo are a wake-up call that India is potentially on the crest of a wave on the future of aviation. Is it time for the world to look at India with more clarity, or is the dream of having the largest aviation market space in the world getting closer?
For many years, the aviation world waited for Air India to be privatized, for Jet Airways to return, for India to move from being predominantly seen as a domestic market to an international player. So, we were all looking at India. In the meantime, we saw the birth of another domestic player in Akasa Air, opening of Mopa Airport in Goa, and new projects under construction like the Jewar airport in Uttar Pradesh, and in Navi Mumbai.
In essence, India has made some significant progress in the aviation sector. First, Air India, with its new privatization approach, and the potential for merging Air India, Air India Express and Vistara, bringing a mix of legacy and LCC. The airline has placed an order for around 500 aircraft, which will allow it to open an international outbound strategy and ensure that Indians travels to from East to West, without having to always pass through a Middle East hub.
On the other hand, the low-cost carrier IndiGo, which was predominantly focussing on the domestic market, placed an even bigger order for more than 500 narrow-body airbus A320 family aircraft. What is key with the IndiGo’s order is that a significant part is based on the long-haul version of the narrow-body aircraft, the role of A321XLR, and the ability to fly up to 11 hours east and west of the country. In essence, this puts India in the same position as the UAE was some years ago.
However, this also puts focus on the link between Air India and the new airport infrastructure. Will the airline look to make multiple hubs, or be like Air China (Beijing), or Riyadh Air (Riyadh), and just focus on Delhi or Mumbai? It’s a question that needs further analysis. For IndiGo, is it a point-to-point vision, using the new extra flight times to penetrate strongly into Europe and north-east and south-east Asia? And, again, where will it be based. Can IndiGo have multiple hubs across the new airports being built?
Two-airline situation
India is moving to a two-airline situation. Air India that is covering all segments but may need to be split across different airports. However, as it is in private hands, the vision may be different. It is not like China where the Government has pushed carriers to dominate parts of the country, and use the airports as hubs across different cities. Can the carrier take a one-city, one-hub approach? And, for IndiGo, the vision of an LCC with a hub strategy has not yet been proven. Emirates and flydubai blend the link between full service and LCC, but we have no real vision thus for an LCC to be connecting 11 hours west to 11 hours east. Can it happen? Is the airport infrastructure being created with this in mind?
In ordering the aircraft, is IndiGo really point to point, or do they look at multiple hubs across the country playing the game of linking cities and countries on a geographical basis. Again, we see this in the USA, where the big three has secondary hubs for regional impact. How would the bases of A321XLRs in Delhi, Mumbai and Goa serve different market interests?
In conclusion, the new orders from the two biggest carriers are a wake-up call that India is potentially on the crest of a wave on the future of aviation. Is it time for the world to look at India with more reality, and is the dream of having the largest aviation market space in the world getting closer?
