Aviation Monitor | 2016-12-13
India: Poised to become the third largest aviation market by 2020

India has the potential to be among the global top three nations in terms of domestic and international passenger traffic. It has an ideal geographical location between the eastern and western hemisphere, a strong middle class of about 30 crore Indians and a rapidly growing economy. Despite these advantages, the Indian aviation sector has not achieved the position it should have and at present it is ranked 10th in the world in terms of number of passengers. Historically, the Indian aviation sector has been a laggard relative to its growth potential due to excessive regulations and taxations, government ownership of airlines and resulting high cost of air travel. However, this has changed rapidly over the last decade with the sector showing explosive growth supported by structural reforms, airport modernizations, entry of private airlines, adoption of low fare - no frills models and improvement in service standards. 


Eyeing its huge potential in the near future, the Government has proposed to promote the growth of Indian aviation sector in a significant manner as the development of this sector has a multiplier effect on the economy. While the domestic demand for air travel has increased considerably in the last few years, the National Civil Aviation Policy (NCAP 2016) is a step in that direction. It is driven by factors like advanced information technology (IT) interventions, enhancing regional connectivity through fiscal support and infrastructure development, low-cost carriers (LCCs), modernizing airports, Foreign Direct Investment (FDI) in domestic airlines. 


Rajiv Nayan Choubey, Secretary, Civil Aviation reiterated that the government is committed for higher growth of civil aviation sector with all possible government’s initiatives in partnership spirit. He added that by December 2016 dozen of schedule commercial operations could begin to connect small towns in the country under its regional connectivity drive. Raju reassured the Indian civil aviation industry, emphasizing that the government of the day is exploring all possibilities for capacity expansion of leading airports in the country as well doing its best to make sure that the regional air connectivity is accomplished.


India is already the tenth-largest civil aviation market in the world, with a market size of around US$ 16 billion. And if the things go in the right direction, our country is poised to become the third-largest aviation market by 2020 and the largest by 2030. India is also among the fastest-growing domestic aviation markets with millions of new passengers as perInternational Air Transport Association (IATA). With its growing and dynamic economy, India is considered to be one of the potential source markets for almost all the Airlines. From improving regional connectivity, making service levels better to increasing frequency of the flights and welcoming new aircrafts on board, the Airlines are seen aggressively promoting and investing in the Indian market. Reiterating the importance of Indian market, TravelScapes interviewed the pioneers from the renowned Airlines where they highlighted their market expansion plans in India and positive expectations from the major source market like India.


AirAsia India: Focusing to ramp up operations in India
The National Civil Aviation Policy has given a clear vision for the growth strategy, says Amar Abrol
TS Gagneet Kaur AirAsia India, an Indian low-cost carrier headquartered in Chennai, commenced its operations in the year of 2014 with Bangalore as its primary hub. The airline is a joint venture with AirAsia Berhad and Tatas. With its friendly and hospitable crew that adds to the experience of travellers, AirAsia India offers best of its services to make the travel a holistic one for their guests! Amar Abrol, CEO, AirAsia India speaks about how they are focusing on the investing in the Indian market to expand their footprints domestically and plan to scale up internationally.

Abrol emphasised that due to the introduction of new National Civil Aviation Policy (NCAP), the entire aviation industry is seen benefitting and have clarity on their future market development plans. ?The National Civil Aviation Policy has given the entire industry clarity and we have a clear vision for our growth strategy. If we talk about Air Asia?s marketing strategy, ours is always an ?India first? one. The NCAP has given us clear direction to ramp up our operations in India and grow our business in the domestic segment before we scale our operations to fly internationally.?

?India is an extremely competitive landscape and the industry is getting crowded with airlines rapidly scaling up their business and fleet. We are currently focusing on investing aggressively in India and increasing the fleet size from 8 at present and achieving the target of 20 aircraft.? He added.

Considering India one of the important markets for AirAsia India, the airline recently added Hyderabad to its network of destinations. ?We have introduced several routes in the last 3 months; we now have daily connections between Bengaluru & Guwahati, Bengaluru & Hyderabad, Hyderabad & Goa and Hyderabad & Kochi,? Abrol informed.

The budget carrier had 2.3% share in the domestic aviation market at the end of September quarter. It flew 589,000 passengers in the three months ended September which is an increase of 42% compared to the year-ago period. Without divulging specific financial details, Abrol said the airline had been seeing gross profit since the new management took over in March. He took care of the airline in March this year.

Abrol said that as of now they are only serving the Indian segment but with things going good for the airline and fruitful futuristic developments, AirAsia India definitely has the International operations on radar.

India: an important market for Cathay Pacific network
The only international airline flying into Hong Kong with 48 flights a week
TS Gagneet Kaur
An award-winning Hong Kong-based airline, Cathay Pacific offers scheduled passenger and cargo services to more than 173 destinations in 42 countries and territories around the world. The airline has had a presence in India for over 65 years. Cathay Pacific Airways and its sister airline- Dragonair currently operate 48 weekly departures from 6 cities in India to Hong Kong. In fact, Cathay is the only international airline flying from India into Hong Kong with 48 flights a week. In conversation with TravelScapes, Rajesh Menon, Regional Sales & Marketing Manager- South Asia, Cathay Pacific Airways, shared how significant market India is for Cathay.

Menon elaborated ? ?Service straight from the Heart? undoubtedly is our USP and our efforts are constantly aimed at enriching our passengers? travel experience. Our brand campaign Life well travelled is a testimony to this belief. It focuses on providing consistency across every touch point, be it at our website, the Airport, in flight, or at our exclusive lounges. Our endeavour is to make our passengers feel recognized throughout their travel experience because we believe in the benefits that great travelling can bring to all our lives. Also, from India, we are the only international airline flying into Hong Kong with 48 flights a week. And with Cathay Dragon, we have strong connectivity into Mainland China. Hence, it?s our service ethos and network which sets us apart from our competitors.?

He highlighted that apart from its other key markets like the United States of America, China and Japan, Cathay believes India to be one its major source markets. ?India is an important market in the Cathay Pacific network. It has a strong economy and high disposable income to offer. Hong Kong is strategically located with no visa requirements and easy access into China. This helps to strengthen business and leisure travel between these two countries. Hence, with a steady growth rate and healthy load factors, we see a lot of potential in India. We also continue to develop new markets like South East Asia and Australia.? Menon added.

The National Civil Aviation Policy 2016 was released in the month of June by the Minister of Civil Aviation, P. Ashok Gajapathi Raju which majorly aimed at enhancing the regional air connectivity to boost the significant growth of civil aviation sector in order to promote tourism. As other stalwarts of aviation industry are positive about the policy, Menon also is very optimistic. Speaking about the efficient Civil Aviation policy, he said ?I would like to congratulate the DGCA on such a robust policy. There have been significant changes; we see tremendous potential in the investment of airstrips and infrastructure. India has a huge untapped potential and strengthening of regional connectivity will boost the overall sector making it the biggest aviation market in the future.?

Eyeing the immense potential of Indian market, Menon also highlighted Cathay?s market expansion plans in India. He said that in 2015, Cathay increased its frequency from 5 to 6 flights from Kolkata. This year is also of historic significance, as they have rebranded their sister airline from Dragonair to Cathay Dragon. In India, Cathay Dragon flies out of Kolkata and Bangalore and the aim is to provide the customers with a seamless experience. As of now, Cathay doesn?t have any development plans in India but it constantly reviews the markets for newer opportunities.

?Our constant focus is to promote Hong Kong as our hub and destination. In light of this, we work very closely with Hong Kong Tourism Board (HKTB) .Next year is the 20th anniversary of the Hong Kong Special Administrative Region and we are very excited to together promote the various events planned to commemorate this occasion.? He added.

Menon further announced ?This year we have added the Airbus A350 to our fleet. With 6 flights already deployed on various routes and another 42 on order, this latest addition to the fleet is momentous for us. Our Indian customers can experience this enhanced product offering on their onward connections from Hong Kong. On the global front, in 2016 we added new destinations like London Gatwick and Madrid and in 2017 we will be launching Tel Aviv and Nha Trang.?

Lufthansa: airline with ?a Soul of Germany and a Heart of India?
With two very strong and distinctive airline brands - Lufthansa and SWISS, Lufthansa Group provides the world class services to the Indian passengers. Considering India as one of the most important long-haul markets, Paurus Nekoo, Country Sales Manager India, Lufthansa Group Airlines highlights that Lufthansa is very well received by the Indian passengers since decades.
TS Gagneet Kaur
Please elaborate your market development plans in India?
Lufthansa is the leading European Group Airline in India and considers India as one of the most important long-haul markets. On Lufthansa, our Indian passengers appreciate our ?Quality made in Germany? approach giving them good value for money. Moreover, through our ?More Indian than you think? philosophy we have demonstrated that we are an airline with a ?Soul of Germany and a Heart of India.? While travelling on SWISS, ?the airline of Switzerland?, our passengers appreciate the classic values of ?Swiss hospitality? and - thanks to the airlines manageable medium size - the personal attention and care for individual needs. Going forward, being a priority market we will continue to invest in innovative products and services and increase our offerings by providing unrivalled connectivity. This, in turn, creates enriching passenger experiences when they fly on the Lufthansa Group.

The introduction of Premium Economy product on our Indian flights at end of last year met with a very positive response. This year we introduced the Boeing B747-8 on our Mumbai-Frankfurt route on Diwali night on October 30, 2016, replacing the iconic ?Jumbo Jet?. The ?Queen of Skies? will offer Mumbai area residents premium onboard product on flights from Mumbai to Frankfurt. Starting February 2017, Lufthansa will be operating its first Airbus A350 between Delhi and Munich. In addition, Brussels Airlines, which is also part of the Lufthansa Group, will be starting non-stop flights from Mumbai to Brussels from March 2017. India is the fastest growing domestic aviation market in the world which grew at a staggering rate of more than 20%. With such remarkable development, we expect to see significant growth levels in international traffic as well. The Lufthansa Group alone operates 60 weekly flights and along with its Star Alliance partners, has one of the largest growing networks to offer to its passengers including those from and to India.

How do you view India as a major source market? What are your primary markets other than India?
With Lufthansa and SWISS, Lufthansa Group, considers India as one of the most important source markets. Lufthansa Group?s main offer to Indian customers is unrivalled connectivity to the entire world. By linking India to the world, Lufthansa Group supports the rapid globalisation of India?s industry - brings in investors and tourists and flies the Indian leisure and business travellers to the far corners of the world. Lufthansa and SWISS together operate 60 weekly flights to and from India. Along with its Atlantic Joint Venture Partners Air Canada and United Airlines, the Group has one of the largest growing networks of multiple European and North American destinations a with seamless connections from India. We are very pleased to say that Lufthansa Group has received an overwhelming response from the Indian market. There is a consistent growth in the load factor and we are expecting to see more and more passengers.

Any challenges that Lufthansa is facing? How are you planning to overcome that?
2016 has been an excellent year for Lufthansa Group in India; we?ve made some great strides this year, and received excellent response from the Indian market.

As an airline operator, we feel there is an urgent need to address issues such as the airport fees and taxes on fuel which are very high in comparison to other countries and a real challenge for all airlines. We need to resolve these issues as soon as possible to make it feasible for airlines to operate profitably in India and thrive.

In your view, what positive effects the new National Aviation policy will have on the aviation industry?
Initiatives such as the new civil aviation policy by the Ministry of Civil Aviation are a good sign and will provide a boost for the domestic aviation sector which will benefit the larger aviation eco-system. Moreover, we feel these strategic initiatives planned by the government will help position India as an MRO (Mechanical repairs and overhaul) hub in Asia strengthening the domestic infrastructure and increasing connectivity further. We believe there was a need for such change and we look forward to more such planned policies in the future.
SilkAir will continue to focus on expanding its networks within the country, Jagdish
The airline currently operates 37 weekly flights from 8 cities in India and the numbers are gradually increasing. In conversation with TravelScapes, Jagdish Bhojwani, General Manager India, SilkAir shares his marketing strategies in India and plans to provide a supreme range of long haul connections to international travellers.
TS Gagneet Kaur
What are your market expansion plans in India?
India is an important market for SilkAir. Currently, we have 37 weekly flights from 8 cities in India and are steadily growing. Given that the aviation market in India is set to become the third largest by 2020, our goal is to continue to develop our network further, offering new destinations and an unmatched range of long haul connections for international travellers. We continue to seek opportunities to enhance our network and are constantly reviewing potential new destinations to fly to. We will continue to focus on expanding our networks within the country.

Please share your views on the new National Aviation policy 2016 and how is it beneficial for the airlines?
The Government has undertaken through the New Civil Aviation policy improving airport infrastructure, attracting foreign investment, development of a progressive civil aviation policy, reviewing bilateral agreements with countries to augment capacities and marketing India as a favourable tourist destination overseas which adds to increased flow of traffic. As one of the fastest growing aviation markets, the Indian Government has set out in the right direction to accelerate development and growth through such positive steps.

Any challenges that the airline is facing? Your plans to overcome that?
Our main challenge remains similar to what the other airlines face; with regards to fuel cost and high taxes. It is encouraging to see strong efforts being taken by the Indian Government to develop the Indian civil aviation sector.

What are your primary markets other than India?
We have been the pioneers to venture into diverse, secondary destinations in Asia, some of which are still relatively untouched by mass tourism. As an airline focused on connecting consumers with Asia?s newest frontiers, SilkAir has always looked to cater to these changing travel patterns, offering customers access to new and exotic destinations across Asia.

Currently, our major traffic is connecting customers to/from Singapore Airlines? network connecting at Singapore from long-haul flights such as those from UK ,USA and Southwest Pacific. We are seeing good growth in the top end of the intra-Asia market, where an increasing number of travellers in Asia prefer to fly in comfort and safety even on short-haul flights. Our most recent additions to the network include Cairns (May 2015), Male (Oct 2015), Vientiane and Luang Prabang (Oct 2016), and Fuzhou (Nov 2016).

In conversation with Saminda Perera, General Manager Marketing, Sri Lankan Airlines Saminda Perera spearheads Sri Lankan?s marketing and corporate communications strategy. He counts more than 15 years in the air transport industry and was appointed to his current post in 2015.

In conversation with Saminda Perera, General Manager Marketing, Sri Lankan Airlines
Saminda Perera spearheads Sri Lankan?s marketing and corporate communications strategy. He counts more than 15 years in the air transport industry and was appointed to his current post in 2015.
TS Gagneet Kaur
USP of Sri Lankan airlines?
Essentially, our service portrays the inherent warmth and hospitality of Sri Lanka, the country. We strive to recreate a kind of an experience that a passenger will anticipate to enjoy when he enters the country. As a national carrier, our efforts go far beyond mere transportation. Ours is similar to an ambassadorial duty, to serve our passengers with our traditional warmth and caring ways, while affording them all the luxuries of modern day air travel. This is what transcends from aircraft, hotels, people to generally everything that you see across the country. As much as we adopt modern products and methods, we carry with us an individuality that allow us to be ourselves and greet our passengers with a genuinely welcoming smile?which signifies that we are happy to serve and that we are born to serve.

Your market development plans in India?
We are looking at expanding our reach in the Indian Sub-continent and we concentrate on adding more frequencies and destinations to India. In addition to promoting Sri Lanka, we will concentrate on promoting our other Island destinations in the Indian Ocean that are part of the SriLankan route network, which are Mal? followed by Gan Island and Seychelles. Visitors to the Indian Ocean destinations are mainly tourists seeking beach holidays. The Indian market is very important to us and we aim to tap into same by working closely with the travel trade sector. We host regular meetings with stakeholders, travel agents and media in India and encourage them to experience Sri Lanka on SriLankan airlines. We will also engage in extensive advertising and promotional campaigns to showcase the airline?s unique offerings.

2016 has been a significant year for us as we have expanded our route network in India to 11 destinations. This expansion has placed us among the top 5 airlines with the largest number of frequencies and seats offered by a foreign airline and also the largest airline in terms of destinations offered.

Any comment on the recorded growth or decline within the last few months?
The airline has seen an overall growth of 15 % of tourist arrivals from India to Sri Lanka. India remains the number one tourism generating market to Sri Lanka.

We look forward to continued success for United in the Indian market, Harvinder
The Airlines has carried over 3 million customers on more than 12,700 flights between India and the U.S. since 2005
TS Gagneet Kaur
Operating up to 500 weekly flights across the Atlantic from 29 cities in 15 countries in Europe, Middle East and India, United Airlines is proud to have the world?s most wide-ranged global route network. With the introduction of the new United Polaris service in India, United is looking forward to lifting up the premium cabin travel experience. In an exclusive conversation with TravelScapes, Harvinder Singh, Country Manager - India & Director, United Airlines Business Services Pvt. Ltd speaks about the United?s performance in India.

?Every traveller wants to make the best use of their time while travelling and arrive at their destination well-rested. United Airlines understands this and is committed to making the travel experience more convenient and comfortable through its products and services. Our current United BusinessFirst service is an excellent example of how we have worked to secure the loyalty of our customers, and we hope that the new United Polaris service, introduced onboard from 1 December 2016, will further elevate our premium cabin travel experience.? said Harvinder.

Singh informed that in order to continue to invest in the travel experience and improvements, United has introduced the new United Polaris service effective December 1, 2016. ?A reinvention of our international premium cabin, United Polaris offers an elevated travel experience with a redefined in-flight dining service offering seasonal culinary creations, custom bedding designed by Saks Fifth Avenue and, through our exclusive partnership with Soho House & Co, refreshing amenity kits with award winning Cowshed skin-care products.?

?During 2017, we will also be retrofitting our Boeing 777-300 aircraft to feature new custom seats for United Polaris. Exclusive to United, the seats are individual suite-like pods, designed to ensure customers have a restful night's sleep in the air. They also include features such as forward-facing, all-aisle-access for every customer.? Singh added.

Harvinder, positive about the growing potential of the country emphasised that India is one of important source markets for United. He apprised that the Airline has carried over three million customers on more than 12,700 flights between India and the U.S. since 2005. ?The Indian market is important to United, and we have offered nonstop service to customers across India for over ten years. The popularity of our daily services from Delhi and Mumbai to New York/Newark reflects the demand from travellers wishing to fly to the United States of America. United Airlines operate daily nonstop flights from Delhi and Mumbai to its New York hub, Newark Liberty International Airport. Our services not only offer direct access to New York, but also an unparalleled range of connections via Newark to hundreds of destinations throughout the Americas.

We thank all of our customers from across India who have flown with us and, with their support, look forward to continued success for United in the Indian market.?

Commenting further on the recorded growth by the airline, Harvinder informed ?We are pleased with the performance of our Mumbai-New York and Delhi-New York nonstop services in 2016 and expect the Indian market to continue to perform well. While it is our company policy not to publish traffic data for individual routes, load factors on our Indian routes are broadly in line with those for our trans-Atlantic routes as a whole ? 75.4 percent for October 2016.?

United is a founding member of Star Alliance, which provides service to 192 countries via 28 member airlines. The airline has a modern fleet which is the most fuel-efficient among U.S. network carriers (when adjusted for cabin size), an industry-leading loyalty program that provides more opportunities for the customers to earn and redeem miles worldwide, and has approximately 87,500 United employees who reside in every U.S. state and in countries around the world.

THAI will capitalize on the immense opportunity that India will offer to the aviation industry, says Sontichai
The Airline has served approx. 3, 00,000 passengers in 2016 from India to Thailand
TS Gagneet Kaur
Thailand is one of the most popular holiday destinations for Indians and a large percentage of outbound travel from India is for Bangkok and domestic Thailand, said Viset Sontichai, Director ? Indian Sub-Continent (India, Pakistan, Sri Lanka & Nepal), THAI AIRWAYS. He informed that THAI with its ever welcoming services has served approximately 3, 00,000 passengers in 2016 from India to Thailand accepting the fact that India is one of the most promising economies amongst the emerging nations and is eligible to become more vibrant in the years to come.

Viset said that a consistent growth and expansion is observed in India and with its growing economy, all the service providers are seen growing along. ?THAI has successfully made 9 service points (6 of THAI & 3 of THAI SMILE) in India and established itself commercially since its operations. Average cabin Factor in 2016 is 70-80% (All India) and there is constant improvement.?

?In view of the robust economic growth in India and extremely positive scenario for the next 5 years, THAI will capitalize on the immense opportunity that India will offer to the aviation industry. THAI will look at a systematic growth in capacity of India by augmenting flights on the existing metro routes and will also start new destinations.? He added.

Viset emphasises that THAI has always been known for its Hospitable & Royal Orchid Service. ?We take extra efforts to offer customized services which include meal planning, entertainment, conveniently located offices and web services. Our USP is Warmth of Thai Hospitality, wide body equipment, connectivity from 9 hubs in India to 72 destinations in 32 countries using a fleet of 96 aircrafts. World class service, on time performance, good connectivity, reliable & quality product and constant upgrade of services & equipment.? He said.

Apart from providing the world class services on board and showing exceptional performance in its major source markets, THAI, has constantly monitored and positioned its pricing to suit the market requirements, to overcome the ghoulish price war going around in 2016 due to the mismatch between demand and supply. Viset said that besides price war, regular challenges like competition & market conditions always prevail which they resolve as required.

Talking about the recent expansions and future initiatives, Viset revealed that THAI is planning to increase frequency between MUMBAI - BANGKOK -MUMBAI routes from currently 10 flights a week to double daily service. ?We are operating daily flights from Varanasi, Gaya and 3 times a week from Jaipur operated by THAI SMILE. Service from Lucknow to Bangkok should start in December. We are planning to connect Europe via Delhi on THAI. Further, THAI has started service Bangkok -Tehran -Bangkok route effective 16th October 2016 and we will operate Bangkok-Moscow-Bangkok route effective December 2016.? He informed.

Other than India, THAI also has a strong presence in Singapore, Hong Kong, China, Japan, Korea, Australia, New Zealand and Europe.

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