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Air India Eyes Intercontinental Expansion
Air India’s transformation under TATA Group ownership continues at breakneck speed. In addition to new aircraft orders, training partnerships, new facilities, cabin refurbishments, and flight crew recruiting, the airline is expanding its intercontinental network, both eastward and westward.
To the east, three weekly Melbourne-Mumbai nonstops commenced last month, the first direct service to link the two cities in 23 years. Those flights complement Air India’s current daily Delhi-Sydney and Delhi-Melbourne nonstops for a total of 32 Australian market frequencies per week.
To the west, the carrier also hinted that it is setting its sights on new flights to the USA now that the first of 20 ultra-long range Airbus A350 AWBs has joined the fleet. The A350-900’s 18,000 km (9,700 nm) range makes it a likely choice to fly new nonstops rumoured to be under consideration between Delhi and Dallas, Los Angeles, and Seattle.
WHAT’S BEHIND A PUSH TO THE WEST?
Air India started serving the USA nearly 64 years ago with a B707 that flew three weekly flights between Mumbai and New York JFK via London. It wasn’t until 1993 that the airline flew nonstop between JFK and Delhi when longer range B747-400s were added to the fleet. Those aircraft have since been retired and replaced with B777-200s and -300s which now link Indian cities with a handful of American markets.
The big three US airlines - United, American, Delta - have had mixed success in the Indian market. Their well-developed domestic networks tap into a diaspora of nearly five million Indians living in the USA. That huge market can travel on a handful of US flag carrier nonstopsor make one-stop connections to Delhi or Mumbai. Yet US airline frequencies pale in comparison to the schedule, price, service, and convenience of their foreign competitors.
A STRATEGIC MOVE FOR A BIGGER SLICE OF AMERICAN PIE
Competition from US carriers may not be the main driver behind Air India’s new USA routes. All three American airlines reduced frequencies or suspended flights during the pandemic.
Delta Air Lines has yet to resume flying the JFK-Mumbai route. American Airlines appears to have scuttled its plan to launch Seattle-Bengaluru nonstops, even retrenching some international service from the Pacific Northwest city. Only United Airlines appears to be reinstating some flights, San Francisco-Delhi and Chicago-Delhi (starting late March) to supplement its current Newark-Mumbai and Newark-Delhi nonstops.
Air India, like the US airlines, faces more formidable competition from two Middle East carriers, both of whom fly to every major North American city.
|Airlines flying India to US →
India via DXB
India via DOH
India via AUH
|Boston New York/Newark Washington Miami Orlando
|Boston New York/Newark Washington Miami Philadelphia
|New York/Newark Washington
|Boston New York Washington
|Seattle San Francisco Los Angeles
|Seattle San Francisco Los Angeles
Source: Airline Websites
NONSTOPS VS. EXCELLENT ONE-STOP CONNECTIONS
Take a look at the route maps and schedules of Emirates, Qatar Airways and, to a lesser extent, Etihad, and you see daily nonstops from their hubs to the key business and leisure cities across the USA.
Qatar and Emirates each serve 12 West Coast, Midwest, Central, and East Coast cities while Air India’s presence is limited to only three points – the New York/Washington corridor, Chicago, and San Francisco. Their frequencies and seat capacity means that, for example, Qatar Airways can offer a fast, 70-minute, seamless, online Doha connection between Dallas and Kolkata. The origin to destination 20h 20m total elapsed travel time is impressive.
Although United and American can connect customers via their hubs to their Delhi and Mumbai flights, the Middle East carriers can route passengers on their intercontinental nonstops and then onward to 10 cities in India. Moreover, their multiple frequencies, value incentives such as free transit stopovers, quality in-flight products, frequent flyer programmes and partnerships, and service to secondary Indian cities from their hubs make them more attractive than connections with European carriers who may have strong US presence yet often only serve Delhi and Mumbai.
NEW ROUTE VIABILITY
Air India’s rumoured expansion into the Central and West Coast markets, fills a hole in the carrier’s nationwide presence. It also gives the airline greater access to the country’s hightech regions where corporate travellers often pay higher airfares. That higher mix of premium revenue is essential to make the new route economics work. The airline’s investment in cabin upgrades is consistent with an objective to sell higher-yield tickets.
Carriers like Singapore Airlines, Qantas, and United configure aircraft used on ultra-long routes with a high ratio of premium cabin seats. Air India’s 318-seat A350-900s will have 28 Business Class suites, 24 Premium Economy seats, and 264 Economy seats. Combined, the two forward cabins represent about 17 per cent of total aircraft seat capacity.
Air India is eyeing new flights to the USA and considering nonstop routes, showcasing a strategic move for a larger share of the American market
The A350s are pivotal to the success of any new USA routes. The manufacturer claims its A350-900 cash operating costs average 13 per cent lower per seat than a similar-capacity B787-10 and 40 per cent lower than a B777-200 on a 6,000 nm flight. The per-seat cost for the larger A350-1000 is 25 per cent lower than a B777-300 on a 4,000 nm leg, according to Airbus. That cost advantage is essential since low-yield VFR fares are characteristic of the Indian market. Getting the right mix of fares should make for a viable operation.
THE TIME IS RIGHT TO GROW
The stars seeming to be aligning in Air India’s favour.
US carriers don’t appear to be a major threat since they’re handicapped by their inability to use Russian airspace. On the Newark to Delhi sector, for example, United’s more circuitous routing adds 75 minutes to its nonstop travel time compared to Air India’s more direct track. That disparity can reach up to 90 minutes for some markets.
If the new nonstops to Dallas, Los Angeles, and Seattle are launched, they may help muffle the huge sucking sound from Air India’s Middle East competitors flowing Indian traffic over their hubs.
Air India’s Star Alliance membership expands its presence through partner codesharing in select markets. That additional feed helps fill both international and, equally important, domestic flights as the airline ramps up its network across India with new routes, new A320s and B737s, and more frequencies.
Any new USA nonstops are just one part of Air India’s ambitious vision to build a truly global carrier and establish mega hubs at Delhi and/or Mumbai that link eastern and western hemispheres. One day, the size of that hub could easily match that of Dubai or Doha with one significant difference - the UAE and Qatar don’t have a domestic market of 1.4 billion potential travellers.