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31 January 2018
 |
| Flight (The Total Investment & Insurance Solutions) |
The
launch of low-cost, long-haul flights by Indian airlines will boost outbound
leisure travel and open a multi-billion dollar opportunity for carriers, a
report released on Wednesday showed. The
Total Investment & Insurance Solutions
The
analysis by aviation consultant CAPA India and online travel agent Expedia Inc
comes as large budget airlines IndiGo and SpiceJet Ltd draw up plans to fly as
far as Europe and the United States.
The carriers have so far focused on
shorter-range destinations such as Sri Lanka and Thailand. The Total Investment & Insurance
Solutions
Only 0.3 percent of Indians currently travel abroad for a holiday every year, a
fraction of the estimated 100 million who could potentially afford to do so,
CAPA`s analysis of household income shows. Most Indians travel for education,
business or to visit friends and relatives.
Tourism spending by Indians could rise to as
much as $40 billion by 2027 from about $16.4 billion in 2016, CAPA said,
ranking it sixth in the world ahead of Canada, South Korea and Australia.
"If there is any market where low-cost,
long-haul can work it is India," CAPA India CEO Kapil Kaul said at an
aviation conference in Mumbai on Tuesday, citing its geographic location and a
large order pipeline for new long-range narrowbody jets. The Total Investment & Insurance Solutions
SpiceJet Chairman Ajay Singh said on Tuesday low-cost long haul flights
will be introduced as early as this winter.
IndiGo is
exploring long-haul operations and seeking rights to routes, parent InterGlobe
Aviation Ltd told analysts last week.
The low-cost flights would compete against
full-service Indian carriers Air India and Jet Airways as well as
global rivals such as Emirates and Lufthansa.
BUDGET GROWTH
Low-cost carriers, launched in the early
2000s, already dominate domestic air travel with a two-thirds market share.
The share of budget airlines in the
international market rose to about 23 percent in the fiscal year 2016/17 from
14.5 percent five years earlier, CAPA estimates.
That is expected to rise as Indian airlines have placed orders for nearly 800
re-engined aircraft, such as Airbus A320neos and Boeing Co 737 MAX
narrowbodies. The Total Investment
& Insurance Solutions
The jets, with longer ranges than
predecessors, will enable low-cost carriers to launch non-stop routes to Asian
destinations such as Phuket, Manila, Hong Kong, and Hanoi that are otherwise
unviable today.
By 2025, Indian budget carriers will operate
close to 40 wide-bodied aircraft, which could deliver an additional 2 million
annual outbound leisure travellers to places such as New York and Sydney, CAPA
said.
Low-cost carriers AirAsia India and Vistara, a full-service joint venture
between Singapore Airlines and India`s Tata Group, are expected to launch their
first international flights later this year.The Total Investment & Insurance Solutions
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