Newstrack

International carriers find India operations profitable

Shaheen Mansuri - Mumbai

At a time when air-carriers across the globe are cutting down on unprofitable routes, airlines like SriLankan Airlines and Gulf-based carriers like Emirates and Etihad Airways amongst others, are upbeat about gaining access to newer markets in India.

Senaka Fernando, regional manager, Indian sub-continent and Maldives, SriLankan Airlines, said, "The upcoming India-Sri Lanka cricket series in July-August will attract thousands of Indian tourists to Sri Lanka. In lieu of high fuel prices, we are mitigating our operating costs, but Indian destinations have a huge potential in terms of passenger volumes and hence we cannot ignore India as a destination." He added that Indian operations contribute nearly 20 per cent to the revenues of the airlines and is seen growing at five per cent annually, despite the current grim scenario caused by the surge in fuel prices. The airline is also looking at entering into more code-sharing agreements apart from the one they have with the erstwhile Indian.

Orhan Abbas, vice-president of India and Nepal, Emirates, adds, "Though fuel costs are high, we as airlines have to face the situation and deal with it accordingly. The Indian market is a huge pie, so we shall be introducing 18 additional flights which takes the strength to 132 flights every week to and from India."

Similarly, Etihad Airways has recently signed a codeshare agreement with Jet Airways to have greater access to fliers across India. The codeshare agreement which came into effect from July 1, between Abu Dhabi and the Indian cities of Delhi and Mumbai will provide additional connection opportunities from key destinations, including Damascus, Beirut and Jeddah in the Middle East, as well as Geneva, Munich, etc. However, analysts are of the opinion that these airlines which pull huge Indian tourists to their respective countries get attractive subsidies from their respective governments. Also, the ancillary expenditure by tourists serves as a boost to those countries' tourism industry. Besides these factors, the airlines want to reap benefits in a scenario wherein Indian outbound travel is on an upsurge, despite high fuel surcharge.

Meanwhile, R Sreesankar, head research, IL&FS Investsmart says, "It is not that the airlines have planned greater access to Indian destinations now. It was well-planned much before the fuel prices shot to unimaginable heights recently."