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Boost for leisure travel as Indian carriers start low-cost, long-haul ops

Tourism spending by Indians could rise to as much as $40 billion by 2027 from about $16.4 billion in 2016, CAPA said, ranking it sixth in the world ahead of Canada, South Korea and Australia.

Reuters  |  MUMBAI 


 The launch of low-cost, long-haul flights by airlines will boost and open a multi-billion dollar opportunity for carriers, a report released on Wednesday showed.

The analysis by consultant and comes as large budget airlines and Ltd draw up plans to fly as far as and the

The carriers have so far focused on shorter-range destinations such as and

Only 0.3 percent of currently travel abroad for a holiday every year, a fraction of the estimated 100 million who could potentially afford to do so, CAPA's analysis of household income shows. Most travel for education, business or to visit friends and relatives.

Tourism spending by could rise to as much as $40 billion by 2027 from about $16.4 billion in 2016, said, ranking it sixth in the world ahead of Canada, and

"If there is any market where low-cost, long-haul can work it is India," said at an conference in Mumbai on Tuesday, citing its geographic location and a large order pipeline for new long-range narrowbody jets.

said on Tuesday low-cost long-haul flights will be introduced as early as this winter.

is exploring long-haul operations and seeking rights to routes, parent Ltd told analysts last week.

The low-cost flights would compete against full-service carriers and as well as global rivals such as and


Low-cost carriers, launched in the early 2000s, already dominate domestic with a two-thirds market share.

The share of budget airlines in the international market rose to about 23 percent in the fiscal year 2016/17 from 14.5 percent five years earlier, CAPA estimates.

That is expected to rise as airlines have placed orders for nearly 800 re-engined aircraft, such as A320neos and 737 MAX narrowbodies.

The jets, with longer ranges than predecessors, will enable low-cost carriers to launch non-stop routes to Asian destinations such as Phuket, Manila, Hong Kong, and that are otherwise unviable today.

By 2025, Indian budget carriers will operate close to 40 wide-bodied aircraft, which could deliver an additional 2 million annual outbound leisure travellers to places such as and Sydney, CAPA said.

Low-cost carriers and Vistara, a full-service joint venture between and India's Tata Group, are expected to launch their first international flights later this year.



(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, January 31 2018. 09:22 IST