Airlines in India spread their wings to escape airfare war at home

Indian airlines are turning to the international market in search of better returns as the intensifying fight for a bigger share of the world’s fastest growing domestic market – where price is king – drives down profits.

While global airlines’ profits have been strong since 2015 – though with wide regional variations – Indian carriers are struggling to remain profitable, despite filling nearly 90 percent of their seats and benefiting from a more than doubling of domestic passenger numbers over the last four years.

“It is an incredibly tough domestic market, very price sensitive,” said Stephen Barnes, chief financial officer of Singapore Airlines, which operates an Indian carrier, Vistara, in a joint venture with the Tata Group.

“Commanding a premium for a premium product is hard to do. From our perspective we invested in order to see the business grow internationally. If you look at the results of Indian airlines their performance is better internationally.”

Promotions such as $50 one-way tickets on the two-hour flight from Mumbai to Delhi are easy to find and, with airlines expected to take delivery of more than 500 aircraft over the next five years, pressure on fares and profits is increasing.

India is one of the cheapest domestic airline markets in the world, with an average fare of 13 cents per kilometre flown, according to data from travel firm Rome2Rio, less than half the 27 cents per km average in China and the United States.

Airlines including Vistara, SpiceJet Ltd and InterGlobe Aviation Ltd’s IndiGo are in talks to buy or lease wide-body aircraft as they firm up international growth plans to boost profitability.

About author

TnH Global
TnH Global 3879 posts

Our platform is the most comprehensive, current and accurate content destination for tourism that also offers the opportunity to connect and network with quality buyers and sellers.

Name: TnH Global              Email: admin@tnhglobal.com

You might also like

SINGAPORE ADDING JOLLY TO THE SEASON

‘Tis the season to be jolly? Well, almost. And by now  we all know that that means that as you are reading  this, dates are being worked out, destinations are

Slider

Jumeirah Vittaveli introduces first ice rink in the Maldives

Eco-friendly winter wonderland to open this December Jumeirah Vittaveli brings a new first to the Maldives this festive season with the opening of the destination’s first ice rink. The rink

Trending

National Tourism Day in India: 4 things India can learn from China to attract more tourists

India celebrates National Tourism Day on January 25 every year. The idea behind creating this day was to create more awareness that promotes tourism in the country. Indian tourism also

0 Comments

No Comments Yet!

You can be first to comment this post!