Tata-owned Air India may help India become international transit hub

Air India is tweaking its international network to enable more I2I connections

Consider this: despite a traffic of over 130 million passengers flying international-to-international (I2I) routes per annum over India, only one-sixth of the long-haul traffic (26 million) emanates from the country.

 

That is why Delhi, the country’s largest airport, has a mere 1 per cent share of this 130 million market of passengers who transit from the capital — a minuscule compared to a 10 per cent share held by Dubai and another 7.5 per cent held by Doha. 

That’s not all. Out of the 26 million passengers who fly long haul to and from India, a majority of them (as much as 20 million per annum) is on connecting traffic (the rest flies direct). And 85 per cent of those looking for connecting flights (or 17 million passengers) connect through non-Indian hubs using foreign carriers. Most of this traffic is captured by global airport hubs like Dubai and Doha, leaving Indian airports out in the cold. 

But there is good news. Tata-owned Air India is quietly implementing a strategy to grab a larger share by tweaking its international network to enable more I2I connections as it expands capacity, brings in more new wide-bodied aircraft, upgrades its product offering and goes to more routes to grow this segment.   

To put into perspective, foreign carriers control over 78 per cent of the international long-haul flights from and to India. Air India is at 21 per cent and the remaining portion is with others. But according to projections, the I2I traffic over India is expected to hit 200 million by 2035, providing an even larger market pie for domestic carriers to grab. And India with its strategic location and developing aviation ecosystem can transform its world-class airports like Delhi, Mumbai and Bengaluru into global transit hubs. 

  The initial results, say industry watchers, is already showing. Air India traffic from the UK and the European Union (EU) has grown fourfold since December 2023. Those who closely follow its route planning say this has partly happened as the airline is now capable of offering passengers in the UK and Europe convenient connections to Southeast Asia and Australia through its primary hub in Delhi. To do so, it has optimised connection times between flights, both ways, to a comfortable 2.5-3 hours compared to over 12 hours earlier, providing greater flexibility and connectivity at competitive fares. 

“Air India will continue to play an active role in the government’s vision of developing India as a major transit hub between the East and West, using Sixth Freedom rights. Nearly 130 million I2I traffic currently flies over India, and we see an opportunity to drive some of that traffic through our Delhi, Mumbai, and Bengaluru hubs. With that objective, we have optimised our network and schedules to build bank structures at these hubs. This has enabled seamless two-way connections to around 95 per cent of the long-haul international market from India. Today, nearly 10 per cent of our total international passenger traffic is I2I, having increased four times since Air India’s privatisation. As we expand our wide-body fleet, we will push to further grow this share of our business,” an Air India spokesperson said.   

Air India has also realigned its short-haul network to enable convenient East-West travel through India as a hub. For instance, earlier most of Air India’s short-haul routes were focused on West Asia. Over the last couple of years, Air India has realigned its network to expand significantly in Southeast Asia, Saarc, and the Far East markets, bolstering its network in the East just like it has done in the West earlier. 

To do so, it has recently launched flights to London Gatwick (from three Indian cities), Milan, Zurich, Copenhagen, and Amsterdam. It also expanded its network in the East to destinations like Ho Chi Minh City, Bali, Kuala Lumpur, and Phuket. Air India has also increased its frequency on several routes to destinations in Europe as well as to the East to make these connections work. It has increased frequency to destinations such as Bangkok, Singapore, Kathmandu, and Colombo. 

The expansion in routes in the West and the East will, say analysts, help Air India to woo passengers from more European cities with India as a transit point to more city options in East Asia as well as the lucrative Australian market.