Middle East Loses its Luster for India's Airlines

Will the majority of future of India-Gulf flights go through Dubai?

The first 9 months of 2012 will see a major re-shuffling by India’s airlines on the heavily trafficked India-Gulf sector, as airlines respond to higher fuel prices and a poor regulatory environment, and Air India continues to re-align its network strategy.

Air India will be enacting the most significant changes, primarily in Dammam. The third city of Saudi Arabia has a huge Indian population to work in the numerous oil fields and ancillary industries that dot the world’s most oil-rich region, Saudi Arabia’s Eastern Province. Despite this large traffic base, traffic from Dammam is mostly junk-yield VFR travel, especially for a carrier of Air India’s (non-existent) caliber, which is unsustainable for Air India in the face of rising costs and fuel prices. Thus Air India has announced a consolidation of Dammam services to its primary hub at Delhi. Dammam-Delhi will be served daily with an A319, replacing the current twice weekly service with Boeing 777-300ER. However, more than half of Air India’s remaining Dammam flights will all be cancelled, including Mumbai-Dammam. Air India has had direct flights between Mumbai and Dammam since the 1960s, and the end of this route is indicative of Air India’s continual shift towards a Delhi-centric airline since the decision was made to turn India’s capital into Air India’s primary hub in 2009. Along with the thrice weekly A320 service from Mumbai, current 4 weekly Hyderabad-Dammam A320 service will also be cancelled. Daily tag on service Sharjah-Dammam (linked to Varanasi and Lucknow flights) is cancelled as well. Dammam will continue to be served from Kozhikode and Trivandrum.

Meanwhile, other notable changes include the addition of a Bahrain tag to daily Delhi-Abu Dhabi services, which represents a return for Air India to Bahrain after the destination had been previously given over entirely to Air India’s low cost wing Air India Express. 2nd Daily Mumbai-Dubai flight will be re-instated with Airbus A330-200 equipment, enabled by substitution of 777-300ER for A330-200 on 7 weekly Mubai/Delhi-Jeddah frequencies (3 ex-Delhi, 4 ex-Mumbai). This 777-300ER meanwhile, is freed up by substitution of 747-400 and A320 family for 777-300ER on select Kerela-Gulf, as well as the removal of 777-300ER from Delhi-Dubai daily services in favor of Airbus A321. A full catalogue of Air India’s Middle East changes can be found at the bottom of this post, courtesy of airlineroute.net.

India’s largest private carrier Jet Airways, meanwhile, has been more muted in its response to the rising fuel prices and increased competition, but it is of course much smaller than Air India to and from the Gulf. Apparently seizing on the same trends as Air India, Jet Airways has announced a temporary reduction in many Kerala-Gulf sectors from daily to 5 weekly. The routes affected are from Trivandrum to Sharjah and Muscat, and Cochin to Muscat and Doha. On Kerala-Gulf sectors, the majority of the traffic is considered VFR or visiting family and relatives, with a smaller tourist component, and very limited business traffic. This breakdown is very consistent with variance in traffic across the various days of the week, meaning that it is not necessary for Jet to maintain services every day of the week. Jet currently has reduced service only till the end of March, but we feel that it would be prudent for them to extend these reductions further in order to boost profitability.

More troubling is Jet Airways’ subsequent addition of 4 weekly Delhi-Dammam services from mid March 2012 (17th March to be exact) using Boeing 737-800 equipment. Considering that Air India will be consolidating to the same route later in 2012, does it really make sense for Jet Airways to go head to head with Air India on a yield-limited sector? Moreover, Air India is ending Mumbai-Dammam, and Jet Airways is perhaps strongest in Mumbai. It might be more effective for Jet to target the limited business and high yield leisure traffic between Mumbai and Dammam as opposed to splitting a smaller full service market with an irrational pricing agent such as Air India. The schedules for Jet Airways Delhi-Dammam can also be found at the bottom of this story, once again courtesy of the excellent airlineroute.net blog.

Dealing with its own fiscal and operational issues, India’s third full service carrier Kingfisher has cut its Gulf operation down to almost nothing; 3 daily flights to Dubai (one each from Bangalore, Delhi, and Mumbai). Kingfisher had once operated to Saudi Arabia and other Gulf destinations as well, and the drawdown in India-Gulf mirrors Kingfisher’s overall capacity pull down, which has seen the carrier slash more than half of its capacity down to a level of around 200 flights per day. Neither GoAir nor SpiceJet operates to the Gulf (though the latter might begin to do so soon as domestic avenues for growth dry up), but the third Low Cost Carrier (LCC) of India, IndiGo is likely to add further flights to the Gulf, as it evolves towards a model of around 20% capacity deployment abroad, and adds frequencies later this year. Muscat was already mentioned as a potential destination, and further destinations are likely to complement the carrier’s existing Dubai service. Only Saudi Arabia is fully saturated under current the current bilateral agreement, so IndiGo’s possibilities are virtually endless.

Even amongst India’s full service carriers, the trend for Gulf flights is to use their LCC wings as the primary tool. Air India Express has already taken over many non Mumbai/Delhi flights to the Gulf (excluding Saudi Arabia b/c of the bilateral), and indeed Air India Express’ lower costs and more efficient 737-800 aircraft are more suitable for the VFR heavy Gulf Sectors. Jet must first integrate its Jet Konnect and JetLite brands before considering international expansion, but they too can use an LCC wing effectively to carve out a niche in this huge market. Gulf based LCCs are expanding even more exuberantly than Indian ones, with carriers such as FlyDubai adding capacity to India at exponential rates.

At the same time, the full service market between India and the Gulf has been all but ceded to airlines on the Gulf end. Emirates has, for the most part, saturated its allotted capacity, but Etihad, Turkish Airlines, and Qatar Airways to a lesser extent, all have room for expansion. Even secondary carriers such as Gulf Air are sending their most up-to-date premium products, with Gulf Air substituting its new amenity-filled A321s onto their Mumbai and Delhi routes. Whether or not government malfeasance is at the root of this imbalance, the future of Gulf service on India’s airlines increasing appears to be of the no-frills variety.

Schedule Changes

Air India Summer 2012 Middle East Changes

Abu Dhabi / Bahrain

Delhi – Bahrain – Abu Dhabi – Delhi Abu Dhabi service on outbound operates via Bahrain, where AI is resuming operation
AI941 DEL1745 – 1915BAH2015 – 2225AUH 320 D
AI940 BAH2015 – 2225AUH0005+1 – 0515+1DEL 320 D

Mumbai – Abu Dhabi Airbus A319 replaces A320, Daily service

Dammam / Sharjah

Delhi – Dammam Service changes from 2 weekly 777-300ER to Daily A319. Operational schedule moves from morning/noon to red-eye.
AI913 DEL0810 – 1010DMM 77W 37 -24MAR12
AI913 DEL0130 – 0345DMM 319 D 25MAR12-

AI912 DMM1250 – 1855DEL 77W 37 -24MAR12
AI912 DMM0445 – 1115DEL 319 D 25MAR12-

Amritsar – Sharjah – Dammam Sharjah – Dammam sector cancelled. Service to Sharjah remains at 4 weekly with schedule changes on return flight and will originate to/from Delhi

Hyderabad – Dammam 4 weekly A320 service cancelled

Lucknow – Sharjah – Dammam Sharjah – Dammam sector cancelled. Service to Sharjah remains at 3 weekly with schedule changes on return flight and will originate to/from Delhi

Mumbai – Dammam 3 weekly A320 service cancelled

Dubai

Delhi – Dubai AI995/996 Airbus A321 replaces 777-200LR/-300ER
Kozhikode – Dubai Airbus A321 replaces A320, Daily service
Mumbai – Dubai 2nd Daily service restored with A330-200
AI957 BOM1445 – 1605DXB 332 D
AI983 BOM2030 – 2155DXB 321 D

AI956 DXB1710 – 2130BOM 332 D
AI984 DXB2340 – 0405+1BOM 321 D

Jeddah (Previously reported on this site)

Delhi – Jeddah Boeing 777-300ER replaces A330-200, 3 weekly
Mumbai – Jeddah Boeing 777-300ER replaces A330-200, 4 weekly

Muscat

Delhi – Muscat Airbus A319 replaces A320/321, Daily service

Riyadh

Delhi – Riyadh Introduction of 3rd weekly service with Boeing 777-200LR
AI925 DEL1525 – 1730RUH 77W 16
AI925 DEL2010 – 2215RUH 77L 4

AI924 RUH0710 – 1355DEL 77W 16
AI924 RUH2330 – 0615+1DEL 77L 4

Mumbai – Riyadh AI927/920 (Day 24 from BOM, Day 35 from RUH) operates with 747-400, replaces 777-300ER

Thiruvananthapuram – Kochi – Riyadh Boeing 747-400 replaces 777-300ER, 2 weekly

Jet Airways Delhi-Dammam Schedules

Jet Airways from 17MAR12 is starting 4 weekly service on Delhi – Dammam route, on board Boeing 737-800 aircraft. The airline already operates Daily Mumbai – Dammam service.

Schedule from 25MAR12:

9W568 DEL2000 – 2150DMM 73H x245
9W567 DMM2250 – 0530+1DEL 73H x245