How International, Indian Air Carriers Joining Forces To Leverage India’s Aviation Market
Earlier this month, Japan Airlines (JAL) and India’s new premium airline Vistara signed an MoU to pursue commercial opportunities that combine the synergies of both airlines. Only recently in August, the Californian online marketer and hospitality player Airbnb made its first airline partnership in India by tying up with Jet Airways. These deals in the Indian aviation space followed a series of other recent collaborations such as Qatar Airways’s interline partnership with Vistara and Jet Airways’s code share agreements with Air France, KLM Royal Dutch Airlines and Delta Air Lines inked in July.
Yes, it’s time for strategic alliances in India’s airline industry now. Close on the heels of a big boom that is predicted in Indian aviation sector, it is witnessing a host of cross-border partnerships and strategic alliances between the industry players and other stakeholders.
Aiming at a larger share in the world’s fastest growing air travel market, several foreign airlines have already signed or in the process of signing business collaborations. While pioneers like Air India and Jet Airways are already operating several partnership with local and foreign peers and are looking for more, new entrants such as SpiceJet, Vistara and AirAsia too are lured by foreign peers to float unique alliances to get connected to the world’s fastest growing aviation market.
Dual Trigger
Crowded skies and the rising competition in India’s aviation sector, set to be the third largest aviation market by 2026, is forcing domestic players to attain maximum operational efficiency and deliver best customer satisfaction through collaborations. “While India offers a high growth market for everyone in the international arena, delivering satisfying and cost-effective service to customers is a compelling need for the domestic players,” says a senior aviation industry expert. So, this is a dual trigger that prompts the increased number of cross-border partnerships in the sector, adds industry consultant, who doesn’t want to be identified as his organisation is currently working on certain deals in the sector and thus need to maintain client confidentiality. “Excellence in operations and exceptional service to customers is the new mantra in the Indian air travel sector now as competition is on a rise,” he adds.
Unique Models
According to industry experts, each of these new partnerships is unique as every players aims to introduce differentiated service experiences to passengers.
For instance, the partnership between Vistara and JAL is aimed at providing greater convenience to their joint customers travelling between India and Japan, and through Japan to points beyond. This alliance will also help them pursue significant cooperation in areas such as code sharing, frequent flyer programme, allowing them to leverage each other’s network, expertise and assets. Vistara and JAL had, earlier this year, entered in an ‘Inter-Airline Through Check-In’ (IATCI) partnership enabling customers to enjoy a seamless through-check-in facility.
“The strengthened partnership with Vistara represents a significant milestone for the two airlines to provide customers better access to destinations,” said Japan Airlines’ executive vice-president Tadashi Fujita, while announcing the deal in India.
According to Vistara CEO, Phee Teik Yeoh, his airline and Japan Airlines share a great deal in common and key among these common values is the focus on excellence in operations and delivery of exceptional service to customers. “We believe that this is only the beginning of many other great offerings to come,” Teik Yeoh said.
Industry data says demand for air travel between Japan and India has grown over the recent years. Therefore, JAL, which currently operates a daily non-stop service between Tokyo and Delhi, has been planning for strengthening its presence in the country through a suitable partner to help boost connectivity between Japan and India, connecting through Delhi.
Similarly, Qatar Airways’s interline partnership with Vistara too will allow Qatar Airways’ passengers to travel seamlessly to and from a wide range of cities within India across Vistara’s network, via Qatar Airways’s existing 13 Indian gateways under a single ticket. “This exciting new partnership will bring enhanced connectivity and increased convenience to our passe-
ngers travelling within India on an expanding premium carrier,” said Qatar Airways group CEO Akbar Al Baker in a recent statement. “The Indian market is very important to us, and this new partnership expands Qatar Airways’ presence in India,” he added.
Airbnb’s maiden partnership in the Indian aviation space is also unique. This deal will help Airbnb to
strengthen its footprint in the Indian market by focusing on establishing a deeper connect with the new age Indian travellers who seek unique travel experiences.
“Millennials are seeking newer, interesting ways to travel and are keen to break away from the conventional means to seek authentic experiences,” says Amanpreet Bajaj, country manager- India, Airbnb.
Low-Cost Driven Market
World’s top aircraft maker Boeing recently estimated a demand for 2,100 new airplanes worth $290 billion in India by 2030. The fast increasing passenger volume combined with a strong exchange rate, low fuel prices and high load factors will be key to lifting the market in the near future. India is a price conscious market and these aspects will help boost the prospects of a low-cost driven market, predict industry experts. Besides, the government’s rural connectivity scheme and plans to develop infrastructure in small and micro cities will further boost the sector. But, since it’s a price conscious market, a low-cost but volume-based business will continue driving the market.
