How Indian airlines are benefiting from Look East Policy
The people-to-people connect part has greatly benefited the airlines, with the winners being Indian carriers in some cases, while foreign carriers in others. The change has been drastic from pre-COVID times to today and has been fuelled by the need from ASEAN to replace or hedge Chinese tourists, who remained away for a longer period due to restrictions in place by the Chinese government on travel. This meant that tourism-heavy economies like Thailand started offering incentives like free visas for Indians to travel, leading to a spurt in tourist traffic. Overall, the India-ASEAN market has been a mix of new connections, increased services and a growth like no other.
Data obtained from Cirium, an aviation analytics company, exclusively for this article, shows that there has been a giant leap in connectivity, with Indian carriers also benefiting from this.
In December 2019, the last full month of operations in the world before COVID started taking its toll, India did not have a connection with Brunei, Laos, the Philippines and Cambodia among the 10 ASEAN nations.
Today, Royal Brunei operates a thrice-a-week service to Chennai; Air Cambodia flies twice a week to Delhi; Air India is starting flights to Manila in September while Laos remains the only blank spot right now.
Among all the countries and connectivity, the India-Vietnam connectivity has seen a new high. From just 21 flights a week in December 2019, the connectivity has now gone up to 82 weekly flights. However, only 21 out of these are operated by Indian carriers — 14 by IndiGo and seven by Air India. The rest are being operated by the two Vietnamese carriers, Vietnam Airlines and VietJet. Their network in India has spanned to Ahmedabad, Mumbai, Bengaluru, Kochi, Delhi and Hyderabad to connect to Ho Chi Minh City and Hanoi, after having tried a few other variations. Overall, the seats went up nearly four times, and frequencies have gone up three times.
While the India-Vietnam sector has seen the foreign carriers rule over Indian ones, the story is exactly opposite to Indonesia. By December 2019, all the Indonesian carriers had pulled out of India where multiple variations like non-stop and one-stop flights via Kuala Lumpur or Bangkok had been tried to connect Jakarta and Bali to points in India. On the other side of COVID, IndiGo and Vistara (later Air India) have 21 weekly frequencies to Indonesia, with IndiGo operating a daily flight to Jakarta from Mumbai and to Bali from Bengaluru while Air India operates to Bali from Delhi.
The India-Malaysia market has remained more or less the same, with a slight drop. There are 42,124 weekly seats each way across 222 frequencies between India and Malaysia. While IndiGo reduced its presence at Kuala Lumpur, it added flights to Penang and Langkawi from Chennai and Bengaluru respectively, while Air India returned to Kuala Lumpur. The Malaysian carriers have shrunk 11 per cent even though they have tried multiple options having maxed out on seats to metros due to bilateral restrictions.
The India-Singapore market comprises 57,611 weekly seats across 247 flights this August, a slump of 10 per cent compared to 2019. The Singaporean side has shrunk by 8 per cent since 2019, while the Indian side has remained constant. August also sees seasonal variations to Singapore and often sees drop in capacity by seats or frequencies.
The biggest gainer for seats in the market between pre-COVID and today has been Thailand. This also is the biggest market among the three nations by seats on offer. There was an addition of 35 weekly frequencies and a growth of 10 per cent in connectivity between India and Thailand. The connectivity recalibrated with new points being connected, like Surat-Bangkok, Pune-Bangkok, Bhubaneshwar-Bangkok, Bengaluru-Krabi, Kolkata-Phuket, among others. The Indian carriers grew close to 25 per cent in the India-Thailand market, taking a fair share even after the fall of Go Air, while the Thai carriers shrank about 5 per cent. The total seats on offer each week between India and Thailand stands at 71,350.
The people connect is driven by affordability and opening up of new connections, making it far easier to visit tourist destinations like Krabi, Phuket, Langkawi, Penang or Bali. The total cost, often a true measure of holiday expenditure, dictates the travel plans and Indonesia, Vietnam or Thailand stand out compared to the Maldives, where there was a diplomatic row last year, or European destinations which not only are expensive but also have challenges and lead time issues for visa. The strategic dependence on Indian tourism bodes well for the country as a whole, even when we struggle to attract as many foreigners and the international traffic is dominated by Indians travelling abroad.
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