International airlines vie for the Indian globetrotter

This January has seen 6.52 million people take off for foreign destinations from India, 17% more than January 2023 and, significantly, 0.5% higher than the pre-covid level of January 2020 as well. So far this fiscal (April-January), 57.8 million international passengers were recorded, 24% up on-year and just 1.7% lower than the same period of pre-covid.

Going ahead, foreign airlines like Emirates, Singapore International Airlines, Qantas, Cathay Pacific and Etihad, among others, are anticipating the surge in demand from India to balloon further, and are planning their network accordingly.

Not to be left behind, domestic carriers, too, are anticipating similar surge in demand for foreign travel. Ratings agency ICRA expects international passenger traffic for Indian carriers to surpass the peak levels of FY24.

To be sure, foreign carriers accounted for 56% share in international air traffic to and from India in 2022-23, and Indian carriers, 44%, as per data from Directorate General of Civil Aviation.

Underlining the demand increase is data from online travel portal ixigo, which has seen a 150% increase in searches for international travel in April and May this year compared to last year. Further, despite the high demand, fare increase on flights in and out of India has remained flat on key routes.

ixigo data also shows increased searches for countries that have recently made travel for Indians visa free, including Kenya, Thailand, and Malaysia. Data from ixigo showed a 321% increase on-year in travel searches for Thailand, and more than 100% increase in travel searches for Kenya and Malaysia.

For countries with visa requirements, visa processing platform VFS Global expects to surpass pre-covid level of visa processing volume in 2024. In 2023, it had recorded 93% of the 2019 levels.

“Higher disposable income and competitive fares between domestic and short-haul international destinations are adding to the demand,” Mark D. Martin MRAeS, CEO of Martin Consulting said. “But I think the shortage in capacity on account of low reliability of aircraft and engines could impact international travel.”

Emirates, the largest foreign airline for the Indian market with 10% market share in outbound traffic, is seeing robust demand from Indian travellers for not only Dubai, but also for Kenya, Tanzania and South Africa on account of safari attractions, and also for popular European destinations such as Italy and Switzerland. It currently operates 167 weekly flights connecting nine cities in India to Dubai.

Popular Asian destinations are also on travellers’ radar. “Hong Kong being our home market and a visa-free short-haul destination for Indians, we have witnessed over 70% increase in our forward bookings for the summer period compared to last year,” Anand Yedery, the airline’s regional head of customer travel and lifestyle for South Asia, Middle East, and Africa at Cathay Pacific, said. “This surge in demand is across family travel, corporates, and VFR (visiting friends and relatives) travel.”

The surging demand has seen the Hong Kong-based carrier restoring its operations to full capacity out of Delhi and Mumbai, offering 14 and 10 weekly flights, respectively, with sustained focus on Chennai and Bengaluru operations as well.

Another Asian favourite, Singapore Airlines is witnessing strong demand for its home destination as well as for onward destinations across Asia, Australia, New Zealand and the US. The airline said that it continues to adopt an agile and flexible approach to the Indian market’s demand cycles.

Abu Dhabi-based Etihad, meanwhile, has added daily flights from Abu Dhabi to Kozhikode and Thiruvananthapuram. Globally, the airline is set to increase weekly departures by almost 27% compared to last summer in anticipation of demand, according to a statement from the airline.

Another Singapore-based airline, low-cost carrier Scoot, which currently flies to six cities in India, expects the traveller count to increase and is assessing deployment of aircraft such as B787s and A320s on routes with higher passenger load requirements and longer durations such as India, Brian Torrey, the company’s general manager for India and West Asia, said.

Australian carrier Qantas, which offers codeshare flights with IndiGo for 21 cities in India, is also seeing strong demand on direct flights between India and Australia. In response to this demand, an airline spokesperson said Qantas will add a return flight between Sydney and Bangalore over the summer, taking its count to five return services a week compared to 3-4 at the same time last year.

UK-based carrier Virgin Atlantic, which counts India as its third largest market after UK and the US, is also witnessing strong bookings for the summer season (May and June) across all its three gateways – Delhi, Mumbai, and Bengaluru.

As for Indian carriers, Tata Group-backed Air India and Air India Express, which hold a cumulative share of 19.9%, the highest in international air traffic to and from India, have stated their intent to expand their overseas network with induction of new aircraft. IndiGo, which has 15.7% share and a network of 32 international destinations, expects to allocate more than 30% of its seat capacity to international in the next financial year as against 27% now.

The increasing competition has kept fares lower than last year’s on several routes. Similarly, lack of capacity on some popular routes has also led to a surge.

Data from ixigo shows that advanced air fares for routes such as Delhi-Singapore and Mumbai-Bangkok are down by 10-27% on-year, while fares on routes such as Delhi-Ho Chi Minh City, Delhi-Colombo and Bengaluru-Abu Dhabi are up 30-60% on-year.

“Airfares are dynamic and are influenced by a robust travel demand. Traditionally, airfare levels for summer reflect the surge in demand during the season. It is always best that travellers plan ahead of time and book early to secure their preferred travel times and lowest fares,” Emirates vice-president for India & Nepal, Mohammad Sarhan said.