Its strange as well as disappointing to note that the second part of this topic is being written 4 years after the first part. Strange because a lot of things have happened in this period and disappointing because the airlines have still not fully understood the market and as well as what they want after all this.
As far as the Indian Aviation sector is concerned, there are two different markets.
a) The domestic and Short haul Middle east and South Asian market.
b) The long haul European, Far East and American market.
The dynamics of these two markets interact with each other in a unique manner considering the demography of India and the presence of international hubs around the Indian Subcontinent.
Let us take for example, the market (a). This market mainly consists of semi skilled laborers travelling from rural India and middle class tourists making their first international trips. That means Low Cost model is the new Model-T in town. This is ably catered by our own Indian LCCs like Indigo, Spicejet, AirIndia Express as well Air Asia, Tiger Airways, Air Arabia etc from all Tier-1 and Tier-2 cities. Apart from this full service carriers (Jet Airways Air India and foreign carriers) too take a significant upper middle class travellers and business travellers to these destinations.
Secondly, on the market (b), most of the European carriers and Cathay Pacific, Thai Airways, Singapore Airlines serve almost all major cities in India. Emirates, Qatar Airways and Etihad too form a very significant part that they should've been the first I mentioned. The uniqueness is with the 4 carriers namely Emirates, Qatar, Etihad and Singapore Airlines. These airlines cater to market (a) as well as market (b) significantly. They have established themselves so much in each of the categories that it will be difficult to pull market share from them in a short time span. It would require a lot of patience, significant upfront investment in new routes, and sustained marketing and service to establish yourself.
The two full service Indian carriers namely Jet Airways and Air India started on this path and left it halfway through. Jet Airways technically having run a scissor hub out of Brussels(something I always lauded) was a great idea to start with and what was required was sustained marketing and perseverance to see off the worst of economic crisis in 2008-10 period. What was required was a route rationalization on the North American side of operations starting with reducing 2 daily service to 1 to New York area and catering to other markets like Dallas/Chicago/West Coast. Code sharing a lot of american destinations would've helped its case. Instead it started leasing out its 777s and focused more on market (a). That is LCC dominated and has already been decimated enough. It started going into a cocoon. Jet Airways, you need to identify yourself first and decide whom you want to cater to. And I think 9W has somewhat answered that question by tying up with Etihad. By this Jet-Etihad deal, all 9W is trying to say is "mate, I am not brave enough to play for the long-haul, but if there is enough market I am ready to play your sidekick".
With respect to Air India, the less it is written about the better. Having an Indian hub for long-haul routes is one of the worst decisions ever taken and yet this still ranks way better to its other decisions. The Indian long-haul market is neither dense nor voluminous. It is distributed among the major cities and those are less in numbers. Who will be mad to choose an avg 2 hr flight to DEL, complete immigration and transfer to international for a 14 hr (for North America) or 8 hr (for Europe) flight when they can do all this from their own city for a much less time. Bringing the 787s would not solve the problem entirely. AI cannot always depend on home passengers to fill in seats if it has DEL in mind. It needs to go out there and fight. Its international services need to be synchronized with each other. DEL-LHR, DEL-MIL, DEL-FRA if synchronized with DEL-HKK, DEL-BKK DEL-SYD and sustained with quality service could turn out to be gamechanger with 787s. Air India's market would be partial India partial hub transfer passengers that's the way you live in the aviation industry.
Both the carriers need to understand that if they want to cater to the Indian international market, an Indian hub has no place in the scheme of things. And if you are expanding, better have the guts and patience to weather the storm.
As far as the Indian Aviation sector is concerned, there are two different markets.
a) The domestic and Short haul Middle east and South Asian market.
b) The long haul European, Far East and American market.
The dynamics of these two markets interact with each other in a unique manner considering the demography of India and the presence of international hubs around the Indian Subcontinent.
Let us take for example, the market (a). This market mainly consists of semi skilled laborers travelling from rural India and middle class tourists making their first international trips. That means Low Cost model is the new Model-T in town. This is ably catered by our own Indian LCCs like Indigo, Spicejet, AirIndia Express as well Air Asia, Tiger Airways, Air Arabia etc from all Tier-1 and Tier-2 cities. Apart from this full service carriers (Jet Airways Air India and foreign carriers) too take a significant upper middle class travellers and business travellers to these destinations.
Secondly, on the market (b), most of the European carriers and Cathay Pacific, Thai Airways, Singapore Airlines serve almost all major cities in India. Emirates, Qatar Airways and Etihad too form a very significant part that they should've been the first I mentioned. The uniqueness is with the 4 carriers namely Emirates, Qatar, Etihad and Singapore Airlines. These airlines cater to market (a) as well as market (b) significantly. They have established themselves so much in each of the categories that it will be difficult to pull market share from them in a short time span. It would require a lot of patience, significant upfront investment in new routes, and sustained marketing and service to establish yourself.
The two full service Indian carriers namely Jet Airways and Air India started on this path and left it halfway through. Jet Airways technically having run a scissor hub out of Brussels(something I always lauded) was a great idea to start with and what was required was sustained marketing and perseverance to see off the worst of economic crisis in 2008-10 period. What was required was a route rationalization on the North American side of operations starting with reducing 2 daily service to 1 to New York area and catering to other markets like Dallas/Chicago/West Coast. Code sharing a lot of american destinations would've helped its case. Instead it started leasing out its 777s and focused more on market (a). That is LCC dominated and has already been decimated enough. It started going into a cocoon. Jet Airways, you need to identify yourself first and decide whom you want to cater to. And I think 9W has somewhat answered that question by tying up with Etihad. By this Jet-Etihad deal, all 9W is trying to say is "mate, I am not brave enough to play for the long-haul, but if there is enough market I am ready to play your sidekick".
With respect to Air India, the less it is written about the better. Having an Indian hub for long-haul routes is one of the worst decisions ever taken and yet this still ranks way better to its other decisions. The Indian long-haul market is neither dense nor voluminous. It is distributed among the major cities and those are less in numbers. Who will be mad to choose an avg 2 hr flight to DEL, complete immigration and transfer to international for a 14 hr (for North America) or 8 hr (for Europe) flight when they can do all this from their own city for a much less time. Bringing the 787s would not solve the problem entirely. AI cannot always depend on home passengers to fill in seats if it has DEL in mind. It needs to go out there and fight. Its international services need to be synchronized with each other. DEL-LHR, DEL-MIL, DEL-FRA if synchronized with DEL-HKK, DEL-BKK DEL-SYD and sustained with quality service could turn out to be gamechanger with 787s. Air India's market would be partial India partial hub transfer passengers that's the way you live in the aviation industry.
Both the carriers need to understand that if they want to cater to the Indian international market, an Indian hub has no place in the scheme of things. And if you are expanding, better have the guts and patience to weather the storm.
