Intl carriers find India operations profitable

Written by Shaheen Mansuri | Mumbai, Jun 17 | Updated: Jun 18 2008, 05:37am hrs
At a time when air-carriers across the globe are cutting down on unprofitable routes, airlines like SriLankan Airlines, Gulf-based carriers like Emirates and Etihad Airways amongst others are upbeat about getting access to newer markets in India.

Senaka Fernando, regional manager, Indian sub-continent and Maldives, SriLankan Airlines, told FE, The upcoming India-Sri Lanka cricket series in July-August will attract thousands of Indian tourists to Sri Lanka. In lieu of high fuel prices, we are mitigating our operating costs, but Indian destinations have a huge potential in terms of passenger volumes and hence, we cannot ignore India as a destination. He added that India operations contribute nearly 20% to the revenues of the airlines and is seen growing 5% annually, despite the grim scenario which has emerged due to the surge in fuel prices. The airline is also looking at entering into more code-sharing agreements apart from the one they have with the erstwhile Indian.

Orhan Abbas, vice-president of India and Nepal, Emirates, adds, Though fuel costs are high, we as airlines have to face the situation and deal with it accordingly. The Indian market is a huge pie, so we shall be introducing 18 additional flights which takes the strength to 132 flights every week to and fro India.

Similarly, Etihad Airways has recently signed a codeshare agreement with Jet Airways to have greater access to fliers across India. The codeshare agreement which comes into effect from July 1, between Abu Dhabi and the Indian cities of Delhi and Mumbai will provide additional connection opportunities from key destination, including Damascus, Beirut and Jeddah in the Middle East as well as Geneva, Munich etc.

However, analysts are of the opinion that these airlines which pull huge Indian tourists to their respective countries get attractive subsidies from their respective governments. Also, the ancillary expenditure done by tourists is a booster to those countries' tourism industry. Besides these factors, the airlines want to reap benefits in a scenario wherein Indian outbound travel is on an upsurge, despite high fuel surcharge.

Meanwhile, R Sreesankar, head research, IL&FS Investsmart says, It is not that the airlines have planned greater access to Indian destinations now. It was well-planned much before the fuel prices shot to unimaginable heights