How India's Aviation Clout Is Growing on the Back of Its Aspiring Travelers
India's regional air connectivity is playing catch-up with the demand of its aspirational travelers. And this is set to drive growth in India's aviation industry over the next few years.
This week, India was listed as the third-largest global aviation market by the International Air Transport Association (IATA).
In his speech at the IATA annual general meeting on Monday, Indian Prime Minister Narendra Modi said aviation is poised to become the center of major transformation and innovation in the times ahead. He added that India is prepared for all of these possibilities as the country has an aspirational consumer market.
According to IATA's report, India's 174 million passengers in 2024 accounted for 4.2% of global air traffic. This was significantly less than the United States' 18% share and China's 16.7%. However, India's passenger volume has more than doubled as compared to just over a decade ago. Due to Indian travelers' aspiration to explore, by late last year, international traffic from India was 20% higher than pre-Covid.
Regional Connectivity: According to Modi, the regional connectivity scheme UDAN has been a 'golden chapter' in the civil aviation of India. The UDAN scheme, launched in October 2016, aimed to provide more affordable and accessible flying options to travelers across the country, especially in Tier-2 and 3 countries.
Under the scheme, several new regional airlines such as Fly91 and Star Air have started operations in India and are flying on underserved routes which are incentivized by the Indian government. According to a ministry of civil aviation release in April, 625 routes across 90 airports have been operationalized under the scheme. The scheme's penetration into smaller markets has led to the number of airports across India to rise from 74 in 2014 to 162.
However, despite this growth, the aviation sector in India continues to be underpenetrated. This highlights the potential of the Indian aviation industry to keep growing as demand continues to rise. Over the next five years, the country is planning to build 50 new airports, Civil Aviation Minister Rammohan Naidu Kinjarapu said in January.
Leela Parent Has Lukewarm Debut on Bourses
Luxury hotel chain The Leela's parent Schloss Bangalore listed on the Indian bourses on Monday 7% below the IPO price at INR 406 ($4.74) before rising to close at INR 435.55 ($5.08). The stock slightly declined on Tuesday to close at INR 435.10 ($5.08).
However, the stock failed to hit upper limit on either of the days, indicating moderate investor sentiment. The mega $400 Million IPO of the luxury chain was highly anticipated in the months leading up to the IPO due to it being the largest IPO in the Indian hospitality industry. Last September, the company had filed for a $599 million (INR 50 billion) IPO with the stock exchange regulator, before reducing the size of the issue in the days leading up to the listing.
Despite this, the IPO last week failed to garner the same enthusiasm as seen in recent IPOs in the travel spaces such as TBO Tek and Ixigo. The Leela's issue was subscribed 4.5 times the number of shares on offer during the 3-day window. Still, The Leela now has IPO money. It is planning to use this money to pay down its debts and fuel its hotel expansion. The hotel chain has no plans to deviate away from its luxury branding, but it is looking at niche segments such as wildlife, religious tourism, and heritage to grow its portfolio in smaller markets.
Dubai's New Campaign Features Virat and Anushka
Visit Dubai has unveiled a new campaign with Indian cricketer-actress couple Virat Kohli and Anushka Sharma. The campaign called "Dubai, Ready For a Surprise" is the pair's first-ever destination-focused partnership.
As part of this, a campaign film has been released to showcase Dubai for travelers. Dubai has aimed to highlight its offerings beyond popular landmarks and experiences in order to invite first-time as well as repeat travelers.
'As we work towards the goal of further consolidating Dubai's position as a leading global city for business and leisure, this campaign underlines the diversity of Dubai's ever-evolving offering,' said Issam Kazim, CEO of Dubai corporation for tourism and commerce marketing. He added, 'India remains one of our most important source markets, and partnerships like these help us foster meaningful cultural connections.'
Speaking at the Skift India Summit last year, Kazim had joked that Dubai is an Indian city. India has been one of the largest source markets for Dubai since 2015. 'The culture between India and the UAE is so strong. The historical relationship is so strong. It's natural for a lot of Emiratis to speak Hindi fluently," he said.
The emirate has also routinely partnered with Bollywood celebrities to attract Indian travelers. In 2022, Dubai Tourism launched a global campaign with Bollywood legend Shah Rukh Khan to promote the emirate and its travel spots. According to Kazim, Bollywood stands as a huge travel generator for Dubai, serving as an "organic" way to drive interest.
Air India Enhances Airline Partnerships
Over the past two days, Air India has entered into partnerships with five airlines - airBaltic, Bulgaria Air, Cyprus Airways, Uzbekistan Airways, and Icelandair - and expanded its existing codeshare agreement with Air Mauritius.
As part of its new partnerships, the Indian full-service carrier is aiming to grow its connectivity to Europe and Central Asia. Air India's interline partnerships with airBaltic, Bulgaria Air, Cyprus Airways, and Uzbekistan Airways will expand its network to 16 more destinations across 6 countries, including Latvia, Estonia, Lithuania, Bulgaria, Cyprus, and Uzbekistan.
The codeshare agreement with Iceland's flag carrier Icelandair is expected to boost connectivity between the two countries across 15 routes to India and in Europe. Air India will add its flight code on Icelandair-operated flights between Reykjavik and London Heathrow, London Gatwick, Frankfurt, Paris, Amsterdam, Copenhagen, Milan, and Zurich. Conversely, Icelandair's flight code will be added to Air India-operated flights between Delhi and Amsterdam, Paris, Copenhagen, Frankfurt, London Heathrow, and from Mumbai to Frankfurt and London Heathrow.
Air India's expanded codeshare agreement with Air Mauritius will now allow the two airlines to place their flight codes on a total of 17 routes between India, Mauritius, Réunion, South Africa, and Madagascar.
IndiGo Enters Codeshare Partnership With Garuda Indonesia
After a slew of announcements this week, IndiGo on Tuesday entered into a codeshare agreement with Indonesia's national carrier Garuda Indonesia. The bilateral partnership will allow customers between India and Indonesia to travel through Singapore, Bangkok, Jakarta and Bali on a single booking.
Under the codeshare agreement, IndiGo's network will expand to 17 new destinations across Indonesia. Conversely, Garuda Indonesia will get access to seven destinations in India.
Garuda Indonesia's Commercial Director Ade R Susardi said, 'India is one of the potential markets for Garuda Indonesia. Through this collaboration with IndiGo, it is hoped that it will be able to support the Government's efforts in optimizing tourist visits to Indonesia as well as expanding Garuda Indonesia's international flight network, especially in the South Asia region.'
Agoda's New AI Vacation Planner Launched in India
Online travel agency Agoda has unveiled its AI vacation planner for Indian tourists in its latest marketing campaign. The travel planner, which features Bollywood actor and Agoda brand ambassador Ayushmann Khurrana, has been launched for a limited time on a special campaign website, the company said in a statement.
In the campaign, Khurrana is featured as the 'Chief Wellness Officer Mr. Vacaywala' in the AI travel planner-generated videos. The videos highlight budget-friendly hyperpersonalized travel options, providing travelers with tailor-made itineraries promptly along with additional discounts.
Agoda is seemingly building an emotional connection with this campaign. In these videos, Khurrana addresses travelers by their first name using AI and then proceeds to share travel attractions suited to them based on their personal needs.
MakeMyTrip's Newest Feature for Train Travelers
Online travel company MakeMyTrip has launched a new 'seat availability forecast' feature for train travelers. The feature will provide a predictive view of when seats on a selected train are likely to sell out. For this, the company is using historical booking data with real-time demand signals, it said in a statement.
The company said that according to its data, nearly 40% customers book train tickets across multiple sessions, often over several days. It added that while train ticket reservations open 60 days ahead of departure, most travelers finalize plans closer to travel date, leading to a significant number of travelers ending up with waitlisted tickets due to unavailability.
MakeMyTrip has also launched a 'sold-out alerts' feature which prompts action as seat availability begins to drop. This feature notifies users when tickets on their selected train fall below a defined threshold so that they can book confirmed seats in time.
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