National carrier to embark on a major capacity addition; eyeing for more non-stop international options

With a possible addition of nearly 30 new aircrafts in its fleet by 2016-17 fiscal end, the national carrier has planned a major operational expansion in the near to medium run. Its recently launched Connecting India programme will be the touchstone to provide domestic and international flying options to travellers in tier 1 and tier 2 locations.

Ashwani lohani

For national carrier Air India, the next fifteen month period promises (culminating at 2016-17 fiscal end) to be a spell of major capacity addition. The airline is eyeing for aggressive expansion on all fronts – domestic as well as international and seems to be keen to get in a more competitive mode with a substantial addition to its fleet. On the domestic front, its near run moves will be governed by its recently launched Connecting India programme wherein it will not only enhance frequencies but could also bring new destinations on its radar. The obvious objective is to improve its market share and be ready for a more competitive scenario at a time when the established (Indigo, SpiceJet and Go Air) as well as new entrants (Vistara and Air Asia) in the aviation business have firmed up plans to expand their capacity base. The 20 percent plus growth registered in domestic business (thanks to the low oil prices) in 2015 have emboldened most of the players to scale up their operations and Air India too is keen to make the most of the emerging opportunities. On the international front too, it seems to be well set to introduce non-stop products to some defining global destinations after its recently launched San Francisco flight has met with considerable success in the preliminary months.

In terms of market share in the domestic circuit, Air India in the month of November had stood at number three rank (16.2 percent) – a segment which is led by Indigo (35.5 percent) and Jet and Jet Lite combine (around 21 percent on a cumulative basis). “We obviously have our eyes set on improving our market share and we will be responding to this objective by significantly enhancing our frequencies in the new year and all through the next fiscal under our recently launched Connecting India Programme. As part of this exercise, we are launching a flight between Delhi and Gorakhpur from 15th January,” a senior official of Air India recently told TourismFirst. The route will be served with a 70 seater ATR 72- 600 aircraft and operate six days in a week. This marks another flight addition to the Connecting India programme which aims to provide domestic as well as international flying options to the travellers in the tier1 and tier 2 locations on Air India network. “The flight will offer connection to flyers travelling to various domestic and international destinations from Gorakhpur. Similarly, passengers arriving from the Gulf and other international destinations will get a convenient connection to Gorakhpur from Delhi by this flight,” the official added. Under Connecting India programme, Air India in recent weeks has already launched a Mumbai-Surat flight and flight services from Durgapur connecting the destination with Kolkata and Delhi (served by A -319). In the last week of December, the national carrier has also re-launched the service between Mumbai and Gwalior with ATR-72 aircraft which was earlier suspended. “We are toying with many other options in the domestic circuit which will become operational in the coming months,” the official said.

Air India’s services expansion plans in the near to medium run are obviously rooted in a possible significant addition to its fleet size. According to Air India official, before the end of the next fiscal (March 2017), about 30 new aircrafts will be added to the national carrier’s fleet. “It will comprise a mix of narrow body aircrafts (primarily A 320s), turboprops and wide body aircrafts,” the official informed. The wide body induction will include one more Dreamliner (Boeing 787) which is likely to join the fleet in November this year. For both its domestic and international operations, Air India presently has the largest fleet size among all carriers in India comprising about 135 aircrafts (including 17 belonging to its subsidiary Air India Express). “By the end of 2016-17 fiscal, we are likely to cross 150 aircrafts mark in terms of our fleet size,” the official underlined.

Madrid, Washington could be the next major non-stop offering

Making a major addition to its non-stop international portfolio, Air India had introduced a direct service between Delhi and San Francisco on December 2 deploying the widebody Boeing 777-200 LR aircraft on the route. The aircraft is connecting the two dots in about 16 and a half hours and is considered to be one of the longest non-stop
service provided globally. According to Air India chief Ashwani Lohani, the preliminary response to this service has been quite overwhelming. “Our Delhi-San Francisco service is quite successful and many more such services will be set afoot in the future,” he commented.

The success judgement for this four times a week service is obviously based on the load factor trends. According to a
senior official of Air India, the load factor registered for this service in December had stood at a high 87 percent in the inaugural month (December 2015) and going by the booking trends, the month of January could well show further improvement – at 89 percent. “The success of this flight primarily emanates from the fact that in some way it is connecting two Silicon Valleys of the world. Among the Indians who are booking on this flight, more than 50 percent are IT professionals from cities like Bangalore and Hyderabad,” AI official informed.

Over the years, Air India has built quite a profile in terms of non-stop offerings to transatlantic and European destinations and is presently offering nine services to these routes. The Air India management meanwhile is quite eager to add on more important global destinations to its non-stop offering list in the near to medium run. “To expand globally with qualitative services, connecting India with more important global destinations is certainly going to be a key strategy. And as part of this exercise, we are currently examining to connect Madrid and Washington with direct services from India’s national capital. Nothing though has been finalised as yet,” the official pointed out.

Partnership with states to improve regional connectivity likely to take off after March

Air India joining hands with states to improve regional connectivityAir India’s grand plans to kick off a massive regional connectivity improvement exercise is now likely to take off after the beginning of the new financial year (2016-17). In a significant development last year, Air India chief Ashwani Lohani after taking over the reins, had shot off a proposal to most of the states asking them to partner with the national carrier in kick starting new services to their destination with smaller aircrafts of Air India subsidiary- Alliance Air. As per Air India’s suggestion, the connectivity to smaller towns will be provided under the viability gap funding (VGF) formula wherein states will have the leeway to participate in the fare related decisions if they agree to square off the losses. Nearly half a dozen states had responded positively to Air India’s regional connectivity gameplan and the services where supposed to begin in January. However, the Air India official told TourismFirst that the last-minute details are now worked out with some states and the project will take another two-three months to get off the block.
“Our negotiations are in an advanced stage with two state governments-UP and Gujarat. Rajasthan government had asked for some clarification and we have recently submitted a comprehensive proposal to them. We expect our regional connectivity initiative to commence after March,” the official said while adding that Alliance Air will be better equipped to kickstart these services with the addition of three more ATR aircrafts in its fleet in February. Alliance Air presently has a fleet size of 11 aircrafts which includes five ATR 72 and three ATR 42 aircrafts. The airline is expected to witness a major expansion in its fleet size – 28 aircrafts by the end of 2017.

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