The lure of foreign skies

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: Flying international seems to be the route to more profits. Quite aptly, players like Jet and Kingfisher are increasing their focus on international operations. The numbers say it all. At the moment, the Indian skies have 355 aircraft circling around. These are the total number of planes deployed by domestic carriers. The number is set to go up to about 500-550 by the end of 2010. At the rate at which domestic traffic is growing, however, supply seems to be more than demand.

The total number of passengers carried in the domestic market, in calendar year 2007, was 45 million. The growth in this air traffic, according to the Centre for Asia-Pacific Aviation (CAPA), will be over 25%, in the next few years. At 25%, the year-on-year growth till 2010 comes to about 88 million. With an increase of 1%, the growth works out to about 90 million. At 27%, it is just about 92 million. This is clearly not enough for the 550-odd aircraft that will be deployed by domestic carriers by then.

In comparison, the picture appears rosy on the international front simply because there are fewer Indian carriers, just Jet and Air India, operating in that segment. But the number of international carriers operating flights to and from India is quite a bit.

For instance, all major carriers including Continental, Cathay Pacific, Singapore Airlines, Malaysian Airlines, British Airways, Emirates, Etihad, Qatar Airways, Virgin Atlantic, Lufthansa, etc, have been increasing their frequency of flights to India over the last few years. This speaks of the potential that exists in the segment.

Sample the figures: The number of passengers carried to and from India was 25 million last year. This is set to grow closer to about 20% in the next few years, according to CAPA. At about 20%, the year-on-year growth, till 2010, works out to about 45 million. Though lower than the domestic traffic growth, it is still substantial for local full service carriers to devote their attention to the segment. Says Kapil Kaul, chief executive officer, Indian sub-continent and Middle East, CAPA, “Though closer to 20% as of now, the growth in international traffic could get into the high 20s, going forward.” So the potential is enormous.