Domestic Air Traffic Rises 15 Percent to 13.18 Million in May

Air India has entered into an interline partnership with Bangkok Airways that will allow the Tata Group-owned airline’s passengers connections to 10 Southeast Asian destinations beyond the Thai capital. 

Antitrust watchdog Competition Commission of India (CCI) has approved Tata group’s plan to merge its full-service carriers Air India and Vistara. 

Tata Sons and Singapore Airlines have agreed to consolidate Air India and Vistara by March 2024.

Air India is close to placing landmark orders for as many as 500 jetliners worth tens of billions of dollars from both Airbus and Boeing as it carves out an ambitious renaissance under the Tata Group conglomerate, industry sources said on Sunday.

The Tatas will let go of Indian full-service carrier Vistara as they look to merge the airline with the more “internationally-recognized” Air India, Air India CEO Campbell Wilson said on Monday.

India will invest around $12 billion over the next two years in airports, aircraft and recruitment to meet the booming demand for air travel. The country aims to increase the number of airports from the present 148 to 220 by 2025, for which private builders will contribute roughly $9 billion, with the balance coming from the government-run Airports Authority of India. It entails new terminal construction, greenfield projects, and refurbishment of existing buildings, including old military airfields from the colonial era, as per a Bloomberg report. “We need to put in place the civil aviation infrastructure and capabilities that by 2047 would be able to support a $20 trillion economy within India,” said the country’s civil aviation minister Jyotiraditya Scindia at the ongoing CAPA India Aviation Summit in New Delhi. Scindia said passenger capacity at India’s six major airports is expected to grow to 420 million in four years from 192 million today, and Indian carriers’ fleet will grow to 2,000 aircraft in five years from 700. Additionally, India has eased leasing rules for airlines to lease more aircraft to address aircraft shortages as travel rebounds from the pandemic. He also highlighted how India had tweaked its airplane leasing program to enable airlines to add more aircraft to meet passenger demand, including more “wet leasing,” or renting of planes with crew, for domestic and international routes. Tata Group-owned Air India last month announced a record order for 470 jets and is due to take another 25 leased aircraft.

Indian airlines are expected to record a consolidated loss of $1.6 to 1.8 billion in the financial year 2023-24 ending March 31, 2024, according to aviation consultancy CAPA India. The full-service carriers are predicted to incur a loss of $1.1-$1.2 billion. With a net induction of 132 planes next fiscal, Indian airlines are estimated to take the total fleet of all carriers to around 816 aircraft. However, more than 100 aircraft from different Indian carriers are grounded as a result of supply chain and other issues. Highlighting the potential for growth in aviation, India’s civil aviation minister Jyotiraditya Scindia said that it was time for India to look at manufacturing aerospace products. He added that the aggregate fleet size of domestic carriers is estimated to reach around 2,000 aircraft over the next five to seven years. He claims that by the end of this year, up to 15 Flying Training Organizations (FTOs) could be established, bringing the total number of such organizations to 50 from the current 35. He emphasized the expansion of the drone industry, stating that it is projected to reach a value of approximately $40 billion by 2030 and produce about 250,000 million employees. All industries have an S-shaped evolution curve, and the minister noted that India is currently in the “infancy and growth phase” of its civil aviation industry.

Air India has become the latest entrant to hop on to the bandwagon of ChatGPT. Doing away with an outdated manual pricing system, the airline announced recently that it would be shifting to an algorithm-based software for setting airfares to extract more revenue from each flight. Its modern revenue management software continuously anticipates where people want to visit and how much each flyer is willing to pay, rather than the old method of having one fare for each block of seats — thereby ensuring higher revenue per flight. The airline will reportedly use GPT4 — the latest version of the revolutionary chatbot — to improve the FAQ section, pilot briefings, and more. Speaking at an event recently Air India CEO Campbell Wilson said that the use of the chatbot will not be “gimmicky”, but will be to actually enhance the airline’s functions. Last month, Air India partnered with cloud-based software company Salesforce to transform its customer experience. In another wheel of change under its new owner Tata, Air India is also testing ChatGPT to replace paper-based practices. “Frankly the system is almost so bad it’s good,” Wilson said, adding that this offered the chance to start from scratch rather than “jury-rig” existing architecture. The Tata Group is also integrating the Tata-related airlines, with the merger of Vistara with Air India and the integration of low-cost carriers Air India Express and AirAsia India. As part of its expansion plans, the Tata-owned airline last month had placed a record deal of 470 aircraft — 250 from European planemaker Airbus and 220 from U.S. aircraft manufacturer Boeing — at a list price of over $70 billion. 

A debate over market access was rekindled at an aviation event in India as foreign carriers seeking additional capacity to serve more routes in India feared the Tata Group-owned Air India’s rebirth and record order of 470 jets might capture most of the market. Dubai’s Emirates, Turkish Airlines and Kuwaiti carrier Jazeera Airways have all called for sharp increases in air traffic rights to and from India to meet demand. Vietnam and Indonesia also want more flights, an Indian official said. However, speaking to Reuters India’s civil aviation minister Jyotiraditya Scindia said the country has no plans to increase air traffic rights for the United Arab Emirates. He instead urged domestic carriers to fly long haul and help establish new hubs. “We are going to see an explosion of air traffic in India in the years to come,” he said, adding he wanted domestic carriers to focus on international expansion. “We are not getting enough share from this market,” Turkish Airlines Chief Executive Bilal Eksi said. Dubai has requested an extra 50,000 seats a week on India routes while Kuwait’s Jazeera Airways said the current weekly allowance of 12,000 was inadequate and asked for the cap to be raised to 28,000 seats.  

Travel exchange company EbixCash — the Indian arm of insurance software company Ebix — has been granted regulatory approval for its long-awaited initial public offering (IPO). The IPO is expected to raise between $732 million to $975 million, making it one of the largest IPOs in the financial services sector in India. The company has already filed a draft red herring prospectus, but the IPO is still subject to the necessary approvals, market conditions, and other factors. In the run-up to the anticipated IPO, EbixCash had filed its prospectus with the Indian stock market regulator Securities and Exchange Board of India (SEBI) on March 10, 2022 after CEO Robin Raina declared on the company’s quarterly earnings call that EbixCash would file its prospectus “imminently.” Ebix declared its intent to raise $787 million via the IPO, while retaining a significant majority stake in EbixCash. While EbixCash operates in several segments — payment solutions, travel, financial technologies, business processing outsourcing services and startup initiatives — it receives over 80 percent of its revenue from the payments services business. Under this business, the company offers domestic remittance, forex, international remittance and prepaid cards/gift cards. It largely generates revenue based on commissions and transaction fees from providing these services. 

Representatives of private airlines in India — including IndiGo, Vistara, GoFirst, Air India, and SpiceJet — were summoned by the parliamentary standing committee for transport, tourism, and culture to depose on the subject of exorbitant airfares. “The secretariat has sent an invitation to several private airlines and the Association of Private Airport Operators (APAO) to discuss this issue of urgent public importance,” Indian news agency Asian News International reported, citing sources. Last month, a parliamentary panel had asked the Indian civil aviation ministry to cap the upper and lower levels of airfares and ensure that predatory pricing mechanism is not adopted by airlines in the guise of “free market economy.” The reports mentioned that a perfect balance must be maintained between the commercial interests and passengers’ interests. The committee also pointed out the inaccurate information provided by the private airlines on their websites regarding the number of seats left on the flight and the cost of the tickets. There has been a huge surge in air fliers domestically in India since November last year. As per Indian aviation watchdog Directorate General of Civil Aviation’s domestic air traffic figures, over 12.5 million passengers were ferried in January and 12 million in February.

Airbnb hosts in India collectively made over $12 million from bookings with families last year. Indian family travel on the short-term rental site grew by over 90 percent in 2022 compared to pre-pandemic in 2019, according to a new report released by the company. Most families booked Airbnb listings because of the value and space compared to hotel rooms — with the top-booked categories being near a national park, a pool, near a beach and lake house. Goa, Bengaluru, Karnataka, Pune, Hyderabad, Dehradun, Jaipur, Raigarh, Ernakulam, New Delhi and Nainital were the most preferred family travel destinations in India. Globally, Indians have been traveling to London, Toronto and Dubai for a family getaway. “Families are spending more on domestic as well as international travel and are more willing to support local communities and small businesses. We are glad to see the multiplier effect Airbnb delivers on the local communities as it creates meaningful earning opportunities for those considering hosting on the platform,” said Amanpreet Bajaj, general manager for India, Southeast Asia, Hong Kong and Taiwan for Airbnb. The company recently partnered with Sheroes — a New Delhi-based women’s networking and enabling platform — to grow its community of women hosts in India. Under the partnership, Airbnb will launch a digital content and training program for six months, which will be accessible on relevant Sheroes community channels. This collaboration will provide training to support members of the social platform who are interested in hosting on Airbnb to harness their passion for hospitality, as well as enable more women in India to travel the world independently.