Air India-Vistara merger: The routes that will be in focus

This will allow the airlines to work closely and co-ordinate on routes, codeshare, and offer reciprocal benefits amongst others. Paving the way for the merger means that the combined entity can now plan the integration of its widebody and narrowbody international, followed by the domestic networks.

The approval from both India and Singapore has been conditional subject to the merged entity maintaining services on its routes between India and Singapore. More than being worried about the pricing power that monopoly brings, the competition commissions were worried about the combined power pulling out of the market and disrupting it or causing artificial crunch in capacity.

Also read: Singapore’s competition watchdog grants conditional approval to Air India-Vistara merger

The CCCS order explicitly lists out Singapore-Delhi and vice versa, Singapore-Mumbai and vice versa, Singapore-Chennai and vice versa along with Singapore-Trichy and vice versa as the markets where the airlines have to obtain minimum frequencies which were operated pre-COVID. To avoid mis-interpretation, the CCCS has given a formula on how the frequencies would be calculated for 2019.

The Minimum Committed Frequencies

Data shared by Ciricum, an aviation analytics company, shows that Air India operated seven weekly frequencies to Singapore from Mumbai and Chennai, while it operated 11 weekly from Delhi for an average of 12 months ending December 2019. Vistara operated daily flights from Mumbai and Delhi. The CCCS has devised a formula such that Vistara’s mid-year start is taken into account for calculation. Vistara launched flights to Singapore in August 2019. Air India express operated seven weekly flights to Singapore from Trichy and Chennai, apart from flights from Madurai, Bengaluru and Coimbatore.

For Singapore Airlines, the count stood at double daily to Delhi, 17 weekly to Mumbai and daily to Chennai. Low-cost arm Scoot, had another daily to Chennai, while also operating double daily to Trichy, making the competition from Trichy, Mumbai and Delhi restricted to Air India and Singapore Airline group carriers.

These frequencies now remain the focus for all future calculations as both the CCI and CCCS have relied on pre-covid numbers as the benchmark, understandably so since the COVID years were aberration years.

What is it Now?

Air India has expanded its Singapore operation from both Mumbai and Delhi, taking its Mumbai flights up to an average of 10 per week, while Delhi flights are now double daily. It remains at the same levels as the 2019 average for flights from Chennai. Air India Express, too, has maintained its Chennai flights as is. On the Trichy – Singapore sector, Air India Express has upped its frequency to 14 flights a week this April, as compared to seven in the pre COVID times.

Also read: 2023 airline champs: Vistara grew 1.5 times pre-covid but IndiGo unbeatable

For Vistara, the airline will operate double daily flights to Singapore from Mumbai and a daily from Delhi; higher than the threshold mentioned for approval.

Singapore Airlines group has not made any changes to its pre COVID average and Cirium schedule shows its operations remaining the same as what they were pre-COVID, in line with what the CCCS order demands.

When April 2024 is compared with December 2019 – the last full month of operations without any impact of COVID anywhere, the India Singapore market is seeing a 5.8% growth in departures, up to 293 weekly departures each way from 277 in December 2019 and that translates to a 12% increase in seats with 67,147 weekly seats being deployed each way in April.

This has seen addition of two new routes by IndiGo to Singapore from Bhubaneswar and Hyderabad; Go FIRST’s pull out from Bengaluru and Kolkata as the airline shut down, Air India rejigging its capacity – transferring the flights from Bengaluru to mainline Air India from Air India Express.

Why is it likely to only grow from here on?

The merger of Vistara with Air India and subsequent investment from Singapore Airlines will see the two airline groups cooperate more closely with Air India likely to use Singapore Airlines hub at Singapore as a gateway to points in Indonesia, Vietnam and Australia where it does not fly non-stop and likewise Singapore Airlines making the most of Air India’s three hub strategy at Delhi, Mumbai and Bengaluru to feed into flights to Europe and points in North America.

Also read : A tale of two sectors: Aviation soars while railways crawl

With robust plans like these, it is unlikely that any of the airline would want to go below the pre-COVID levels, except for force majeure which is allowed by both CCI and CCCS orders. On the other hand, the carriers would seek renegotiation of bilaterals to add more flights and destinations leading to higher connectivity.

The author, Ameya Joshi, is an aviation analyst.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!

Published: 07 Mar 2024, 10:58 AM IST