DELHI- Tata-owned Air India (AI) Group is poised to enhance its presence and operational efficiency across more than 100 routes, encompassing over 50 origin-destination pairs. This move aims to maximize the synergies within the Tata Group’s network of four airlines.
The Competition Commission of India (CCI) has assessed air traffic and seat capacity deployment for the fiscal year 2022-2023. According to this assessment, Air India and Vistara (UK) currently share a presence in 48 origin-destination pairs, equivalent to 96 routes.
Air India Overlapping Routes
Data from travel portals, as reviewed by Mint, indicates that 22 out of these 48 pairs offer flights operated by both full-service carriers.
These routes include connections such as Mumbai-Trivandrum, Mumbai-Cochin, Jammu-Delhi, Jammu-Srinagar, Delhi-Varanasi, Delhi-Udaipur, Delhi-Patna, as well as major city connections like Kolkata-Delhi, Delhi-Hyderabad, Mumbai-Chennai, and Delhi-Chennai, among others.
Furthermore, there are 11 overlapping routes within the domestic circuit that are served by at least three airlines within the Tata Group.
These routes include Bengaluru-Delhi, Mumbai-Goa, Bengaluru-Mumbai, Mumbai-Jaipur, Cochin-Delhi, Bengaluru-Hyderabad, Delhi-Lucknow, Delhi-Pune, Delhi-Guwahati, Delhi-Srinagar, and Delhi-Goa.
In its international assessment, the Competition Commission of India (CCI) identified 24 origin-destination pairs that feature overlapping operations by Air India, Air India Express, Vistara, and Singapore Airlines.
Maintaining Minimum Capacity
An analysis of airline networks conducted by Mint revealed that among these origin-destination pairs, 14 are served by both Air India and Vistara. Additionally, two route pairs, namely Delhi-Singapore and Mumbai-Singapore, are operated by three Tata Group carriers: Singapore Airlines, Air India, and Vistara.
The Vistara-Air India merger received approval from the CCI on September 1st. Air India voluntarily committed to maintaining a minimum capacity on various domestic routes to ensure network efficiency post-merger.
These routes include Bhubaneshwar-Delhi, Bengaluru-Guwahati, Cochin-Delhi, Delhi-Trivandrum, Amritsar-Delhi, Bhubaneswar-Mumbai, and Delhi-Bengaluru, where its capacity ranges from 45% to 75%. Additionally, Air India pledged to minimize capacity on certain international routes where its capacity share exceeds 50%.
“Given that we have obtained competition clearance, we can collaborate on our network planning once we receive clearance from foreign authorities. This will help us avoid internal competition. Instead of flying parallel routes to destinations like Frankfurt or London, we can arrange schedules more efficiently, providing customers with a wider choice and better schedule options. So, it will function as two distinct but complementary businesses rather than competitors,” explained Air India CEO Campbell Wilson in an earlier conversation with Mint.
Likewise, the airline has also indicated that the merged entity of Air India Express and AirAsia India will primarily handle the domestic network under a low-cost model. Consequently, a restructuring of both the international and domestic networks is anticipated in the coming months.
Fierce Competition
In a separate development, the recent order issued by the Competition Commission of India has provided insights into the fierce competition within the domestic aviation sector.
A glimpse of the air traffic analysis for the period of 2022-2023 (April to March) reveals that the battleground has effectively narrowed down to three major players: the Air India group, IndiGo, and Akasa Air (QP).
For instance, on the Delhi-Pune route, Air India group held approximately 40-45% of the market share in terms of seat capacity, followed by IndiGo with a 30-35% share. Go First secured a 15-20% stake, while SpiceJet accounted for 10-15%.
Following Go First’s insolvency proceedings this year, IndiGo’s share has surged to over 40%, and newcomer Akasa has claimed a 5% share, while SpiceJet’s share has remained at 10%.
Similarly, Air India group airlines maintained a 40-45% stake in the Mumbai-Delhi route, with IndiGo at 30-35%. Go First held 15-20%, and SpiceJet had 5-10%.
Akasa has entered the competition with a nearly 6% share, and IndiGo has also increased its share to nearly 40%. SpiceJet’s stake, however, has remained around 6%.
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