Flying to nearby cities abroad to get cheaper

Low-cost carriers among those with permissions to fly to short-haul destinations, particularly to East and West Asia

Air travel to East and West Asia is set to get easier, with carriers SpiceJet and IndiGo expanding their capacity for these destinations, following a green signal to do so.

Indian air carriers are well behind foreign peers in utilising the traffic rights allocated under the bilateral services agreements India has signed with 109 countries. There are 834,000 weekly seats on international air routes connecting all these countries with India. Indian airlines have been able to utilise only 23 per cent of the total seat allocations till now; after the new set of permissions, this is set to increase to 40 per cent.

Underserved to a great extent are short-haul destinations, as most airlines would rather take passengers to onward destinations such as Europe and America.

ADDING NEW STOPS To encash on the permission granted to expand capacity, Indian airlines add more foreign destinations INDIGO Kathmandu, Singapore, Bangkok, Dubai and Jeddah (summer schedule) JET AIRWAYS Chittagong, Dhaka, Kuwait, Male, Singapore, Dar-es-Salaam, Bangkok and Dubai (summer schedule), Munich, Frankfurt, Paris, Brussels/ Chicago/San Francisco/ Washington DC (winter schedule) SPICEJET Kabul, Guangzhou, Colombo, Bangkok, Male, Dubai and Hong Kong (summer schedule)

“More people will be able to travel, at better prices. Within India, there is a lack of leisure destinations, barring Kerala and Goa. All other places have a huge shortage of hotel room inventory,” said Keyur Joshi, chief operating officer and co-founder MakeMyTrip.com. In such a scenario, he added, the closer international destinations are good options for travellers.

With low-cost carriers (LCCs) such as SpiceJet and IndiGo adding capacity on these routes, the fares would also become cheaper. The move is likely to boost both inbound and outbound traffic. The permissions to LCCs will help increase presence in the short-haul international sector. “When the Indian LCCs started their flights to destinations in Southeast Asia, the established carriers in the sectors reduced their fares to compete with them. With the fresh launches, the average fares in many of the short-haul sectors will come down,” said a senior airline company official, who did not wish to be named.

Experts say the kind of aircraft that SpiceJet and IndiGo have, they can only do short-haul destinations internationally, which bodes well for the Indian leisure market. The top three outbound destinations for Indians are Singapore, Malaysia and Thailand. In 2011, the total number of outbound tourists from India reached 33 million, about eight per cent higher over a year.

http://www.business-standard.com/india/news/flying-to-nearby-cities-abroad-to-get-cheaper/478289/