Air Indias Nepal Service To Intensify Rivalry With Ia
Even as Indian Airlines and Air India are discussing merger at the top, they are intensifying competition on the ground. Air India has announced plans to launch a Delhi-Kathmandu flight in October, in direct competition to Indian Airlines service to the Himalayan kingdom.
The two carriers now fight for traffic on three routes: India-Singapore-Malaysia, India-Thailand and India-United Arab Emirates. With the Kathmandu service of Air India slated to begin in five months, there will be direct competition on a fourth route. Besides, Indian Airlines has sought government permission to fly to Saudi Arabia, from where Air India earns the bulk of its Gulf revenue.
Air India has sounded the travel trade about twice-a-week Airbus A-310 Delhi-Kathmandu flights from the last quarter of this year. The flight will connect to Air India planes, coming from the United States and Europe, to tap western tourists headed for Nepal.
Travel industry sources said the decision to launch the flight was based on a market study conducted by Air India which found that it could improve its yield on long-distance flights by offering the Kathmandu connection. It was losing out on this traffic as western carriers, with their enormous reach in Europe and the US, utilised their interline agreements with Indian Airlines and Royal Nepal Airlines to elbow out Air India from the Europe/US-India-Nepal sector.
Although Air India, too, has interline connections with Indian Airlines and Royal Nepal, it found the Delhi-Kathmandu sector booked well in advance, in the process losing business on the Europe/US-Delhi sector as well.
Sources said the Delhi-Kathmandu sector was always full and Air India would not be the loser in this, though it is certain to divide traffic during the non-peak season. Indian Airlines operates 130 seater Airbus A-320 planes while Air India will fly 200 seater Airbus A-310 aircraft to Kathmandu. The fare on this sector is deliberately kept low due to an agreement between India and Nepal. However, the entry of Air India with a larger aircraft might trigger a fare war during the non-peak season, sources said.