Domestic airlines planning to go global soon

By 2009, Jet Airways, India’s largest domestic airline, expects half of its total revenue to come from international operations. The carrier has aircraft worth over $4bn on order, to see that this happens. Jet is not the only domestic carrier nursing international dreams — a host of domestic airlines led by the national Indian, Kingfisher and Air Deccan are busy ordering aircraft worth billions of dollars as well as detailing plans for their international forays. Kingfisher Airlines chairman Vijay Mallya has been pushing for liberalisation on the policy for international flights, which currently requires at least five years of operation on domestic routes. Most airlines are losing money on their current operations and hope that the international flights will help funnel passengers into their domestic network. Margins can also be higher on some routes. "Air-India currently has only a 20% share of the international air traffic out of India, with the remaining being with aggressive airlines from around the world who are taking away traffic now by connecting non-metros like Ahmedabad and Hyderabad," says Captain GR Gopinath, managing director of Air Deccan.

The Bangalore-based low-cost airline, which has spent much of 2006 expanding its network all over India is keen to fly to international destinations in the region. The operations will be within the range of the existing A 320 fleet, says Capt Gopinath. Jet Airways and Indian are already international operators with plans to significantly increase their network this year. Indian, which primarily flies to the Gulf countries and South-East Asia is exploring markets like South Africa, Australia, China and UK. A commercial team has already gone to Europe to study the feasibility of flights to the Continent — so far the preserve of Air-India. The delivery of two leased A330s in 2007 is expected to help operate to the new destinations. Indian is currently trying to revamp its domestic operations with new planes and better maintenance schedules. Kingfisher has put its money where its mouth is and has committed to purchase more than 20 Airbus wide-body aircraft, including five Airbus A380s and five A340s.

The airline overcame stringent US regulations disallowing foreign nationals setting up an airline there — 75% of the new airline is owned by Mr Mallya’s three children, all of whom are US citizens. There are plans to start non-stop flights from India to the US. Delta and Continental Airlines are the only carriers to offer a non-stop service to India. Jet Airways hopes to realise its international dreams this year after permission to serve Newark from its Mumbai base via Brussels, came through. The application was held up earlier over allegations it had links to terrorism. The US State Department in November determined the allegations were unfounded and the US Department of Transportation is expected to soon finally approve Jet’s application. It also plans to fly to China, France, Belgium and Netherlands.

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