With more than 35% of international traffic from India headed to the Gulf, it is little wonder that the Middle East is one of the most competitive routes from India.
It will become the first private sector player in the region on Saturday
MUMBAI: Christy Ninan was born and brought up in the Gulf but is currently working in India with Infosys. He often flies to the Gulf to join his family and feels new airlines are cropping up every single time. “Earlier it was just Air India, but now there is so much choice. Often I’m confused as to which airline to fly,” he says.
Well, the list has just got longer. Jet Airways is the latest name adding to his confusion. The company’s first flight to the Gulf (initially to Bahrain and Kuwait followed by Muscat and Doha at a later stage) is set to take off tomorrow, making it the first private sector player in the highly lucrative sector.
With more than 35% of international traffic from India headed to the Gulf, it is little wonder that the Middle East is one of the most competitive routes from India. Currently Air India and its low-cost subsidiary Air India Express service sectors like Dubai, Doha, Muscat, Bahrain and Kuwait along with a plethora of foreign carriers.
An estimated 5 million Indians form the bulk of the passengers to the Gulf.
P K Sinha, vice-president, international relations and industry affairs, Jet Airways, says, “All the carriers will have to part with some market share. To my mind Air India is in a better position to retain market share as compared to others as it is targeting the lower end of the market with AI Express. It is price sensitive market, particularly the Kerala-Gulf sector.” Jet is starting services with the narrow-body Boeing 737 and eventually wants to use larger aircraft.
On the other hand, an analyst with a foreign brokerage who did not want to be named believes Air India could be affected more than its low-cost sibling. “Ministry of Civil Aviation has left Dubai and UAE, which constitute the largest portion of the pie, with Air India. The capacity in other sectors is also quite high. AI Express would continue to do well, but the main carrier could be forced to try and retain the market-share by aggressively cutting fares,” he says.
Ankur Bhatia, executive director, Bird Group, concurs. “It will affect Air India, especially because a majority of Air India’s profits are from the Gulf sectors.” He also believes that not having Dubai in its network is a downer for Jet. In what is primarily a budget market, most of the premium traffic which Jet would be targeting heads to Dubai.
Competitors like Air India seem unperturbed. “We have been operating in these sectors for years and have been facing intense competition from foreign carriers. It is not as if a monopoly situation is being broken. It would not make any difference. We keep going on to new sectors and competition also comes,” says Jitender Bhargava, ED, Air India.
Qatar Airways are also taking the high ground of welcoming competition. Naveen Chawla, regional manager-India, Qatar Airways, says, “Jet is making the right move by venturing in to Gulf. It’s great for the passengers. The market is growing both at the business segment and the leisure segment.”
The UB Group too is lining up a Gulf sojourn starting August. Interestingly, Kingfisher Airlines is planning to use the Deccan brand (rather than Kingfisher) for its Gulf operations while Jet has not opted to take the Jetlite route. Sources in Jet explain that the Gulf route permits were awarded to Jet rather than Jetlite while not discounting the chance of eventually flying Jetlite to the Gulf.
It might just be a good idea to position Gulf services on the value platform. As Christy says, “It’s just a 3 to 4 hour journey. I would rather save some money for spending there.”
n_john@dnaindia.net
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