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Sleeping with the enemy.

Updated: May 17, 2023

I somehow got reminded of this popular 1991 movie yesterday. Have no clue why.


However, in a completely unrelated development, received news/rumours about Air India and Emirates discussing a codeshare.

I'll admit it caught me by surprise because it sounds so bizarre. The reason for my surprise lies in how India's international air travel market is structured.


Bear with me🙏 :


- For India, India 🇮🇳 - 🇺🇸 USA is the most valuable air travel market in💰 terms

- This one market alone accounts for over 20% of the total international air travel to/from India.

- Add India – Canada and the value share crosses 26%

- Add UK – ~ 35%


🛑 Let's stop here and let this sink in.


These 3 markets account for over one-third of India’s total international air travel market by value💲.


Who rules this market:


- Emirates: ~19%

- Air India: ~11%

- No other airline in double digits


🥊 How do Emirates and Air India compare, say for the US market?


Emirates:

- 11 airports in the USA served from Dubai with 82 weekly flights.

- 9 destinations in India served from Dubai with 167 weekly flights.


Growth Outlook - Stagnant/Moderate Growth


Why? Bilateral entitlements between India and UAE (Dubai) are exhausted and have not been expanded for several years now despite significant lobbying/advocacy. Major expansion seems unlikely in the foreseeable future.



Air India:

- 5 airports in the USA served from 3 airports in India with 43 weekly flights.


Growth Outlook - Explosive growth expected.


Reason - Significant wide-body capacity induction from leased (B777s) as well as the new order (06 - A350s deliveries to start within 2023).


India - USA open skies - no restrictions for Indian and US carriers.


More importantly, even a cursory look at Air India's recently leased and ordered fleet composition is sufficient to deduce the focus on capturing long-haul traffic with non-stop flights.


Outcome: Air India is likely to go after market leadership hammer and tongs in the markets discussed above. 🏃


So, is AI - EK cooperation plausible? 🤔

Well, we will know if this holds any water soon enough; I am certainly not holding my breath on this one. If it does come true, won't it be a thriller?


Speaking of thrillers, I will now get back to the movie I spoke about - Sleeping with the enemy.


Let me know what are you seeing in this? 👀

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