The doubling of capacity deployment by Indian carriers on Gulf routes during October 2012 to March 2013, has brought down fares and now flying to many cities in West Asia has become cheaper than flying on some domestic routes.
During this winter, Indian carriers utilised 42% of the 377,724 seats per week to various countries in West Asia, according to civil aviation ministry data. The figure is more than double that of 20% utilisation in the previous winter.
A bulk of the capacity addition has been to Dubai from various Indian cities, including Delhi, Mumbai, Kochi, Ahmedabad and Trivandrum. Return tickets to financial capital of the United Arab Emirates can now be bought for anywhere between Rs 12,000 to Rs 15,000 on domestic low cost carriers SpiceJet and IndiGo. Full service Air India and Jet Airways are slightly more expensive in the Rs 15,000 to Rs 20,000 range but they are still cheaper than their bigger Gulf counterparts.
The low fares because of increasing competition on the Gulf routes have made places like Dubai, Sharjah and Muscat cheaper to fly than routes like Chennai – Srinagar, Trivandrum-Udaipur, Trivandrum-Ranchi, Mumbai-Dibrugarh, Delhi-Bhubaneshwar and other such long haul domestic routes.
“The margins are still strong on the Gulf routes because we can refuel at those locations where aviation turbine fuel is at much cheaper rates than India,” said a senior official at one of India's leading low-cost carriers. “But besides that, there is also a lot of unserved demand there which is why there is such a competition.”
“Indian carriers are only serving around 80% of the domestic weekly demand to UAE and this demand is growing at around 10% per year,” the official added.
Fuel costs are much cheaper in Dubai that at Indian airports. In Dubai ATF is available for around $0.82 per litre while in Delhi its $1.32 and Mumbai $1.34 per litre.
“There are strong trade and tourism ties between southern region of India and Dubai and travellers have requirements of low fares by an Indian airline,” says Aditya Ghosh, president, IndiGo. “With rising business and tourism stemming from