Air India Returns to Australia

Air India discontinued services to Australia in 1997, however now has a renewed focus on the Australian market. On November 1, the carrier will start its only service to Australia: a daily flight from New Delhi to Melbourne with 777-300ERs.

Snapped at Melbourne Tullamarine airport: The honourable Jacinta Allan, minister for industry and trade and minister for regional and rural development; Chris Woodruff, Melbourne Airport's CEO and Arvind Jadhav, Air India's chairman and managing director.

Air India will be aiming to capture the significant passenger flows that exist between Australia and India. IATA BSP data (Airport IS) shows that between April 2009 and 2010, over 615,000 passengers flew between the two countries. All of this traffic is indirect and the market share per carrier is illustrated in the table below:

Source: Airport IS

Singapore has become the natural hub for traffic between India and Australia, with Qantas and Jet Airways operating a codeshare agreement via Singapore into Australia.

There are 184 weekly frequencies between India and Singapore, operated by seven carriers. Air India and Air India express offer 43 weekly flights between them to Singapore, which serves the O&D and connecting markets.

The table below illustrates the top five city pairs in the Australia to India O&D market. This has been split according to passenger numbers and passenger share of the O&D market:

Source: Airport IS

As the data shows, Air India's decision to serve Melbourne is not a surprise as it is the largest O&D market, with nearly 100,000 flying the route between April 2009 and 2010. The vast majority of these passengers travelled with Singapore Airlines, Thai Airways International and Malaysia Airlines.

The Melbourne to Delhi market will no doubt grow with the stimulation of a new non-stop service, coupled with the fact that there are large student and immigration numbers from India to the State of Victoria, which has helped drive the introduction of the service.

Air India will target strong ethnic markets, with over 150,000 people of Indian origin living in Australia. With over 1 million of UK Origin, Air India will be able to compete in the lucrative UK-Australia market which in the same time period saw 1.8 million passengers fly, all indirectly.

Melbourne potentially will have been more attractive to Air India, as it has no curfews unlike Sydney, and will allow maximum aircraft utilisation meaning it will not be stuck on the ground and will allow overnight flying.

Carl Jones, Melbourne tullamarine airport's airline business manager confirms its operational edge over Sydney, for Air India: "Melbourne Airports' 24-hour curfew free operations will continue to provide scheduling flexibility for direct Air India flights, which is ideal for optimising passenger and crew time."

Last year the number of people travelling between Melbourne and India grew by nearly 20%, well ahead of the overall Australian growth rate, he explained.

Jones continued: "Air India, by choosing Melbourne as their base, have seized this market opportunity. The Indian community in Victoria represents around 57,000 people, helping fuel the growth [from India] of those visiting their friends and relatives in Victoria."

"Team Melbourne looks forward to continuing to work with the Indian Consul General, the Australian Indian Business Council and the Australian Indian community as Air India establishes themselves at their Australian base."

Air India is also lining up to join Star Alliance after the successful migration to its new IT platform, planned to be completed by the end of this year.

Once the carrier becomes a Star member, Melbourne will have even better connectivity options.