This will allow the airlines to work closely and coordinate on routes, code sharing, and offer mutual benefits among others. Paving the way for the merger means that the combined entity can now plan the integration of its broad and narrow international body, followed by the domestic networks.
The approval of both India and Singapore was conditional on the merged entity maintaining services on its routes between India and Singapore. More than being concerned about the pricing power that monopoly brings, the competition commissions were concerned about the combined power of pulling out of the market and disrupting it or causing an artificial crisis in capacity.
The CCCS order explicitly lists 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 must acquire minimum frequencies that were operated pre-COVID. To avoid misinterpretation, the CCCS has provided a formula for how the frequencies would be calculated for 2019.
The Minimum Involved 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 during 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, in addition to flights from Madurai, Bengaluru and Coimbatore.
For Singapore Airlines, the figure 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 twice daily to Trichy, making the competition from Trichy, Mumbai and Delhi limited to Air India and Singapore Airline group carriers.
These frequencies now remain the focus for all future calculations because both the CCI and CCCS relied on pre-covid numbers as the benchmark, of course because 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 to an average of 10 per week, while Delhi flights are now doubling daily. It remains at the same levels as the 2019 average for flights from Chennai. Air India Express has also kept its Chennai flights as is. On the Trichy – Singapore sector, Air India Express has increased its frequency to 14 flights a week this April, compared to seven in the pre-COVID times.
For Vistara, the airline will operate double daily flights to Singapore from Mumbai and daily from Delhi; higher than the threshold mentioned for approval.
Singapore Airlines group has not changed its pre-COVID average and Cirium schedule shows that its operations remain the same as what they were pre-COVID, in line with what the CCCS order requires.
When April 2024 is compared to December 2019 – the last full month of operations without any impact from COVID anywhere, the India Singapore market sees a 5.8% increase 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 saw the addition of two new IndiGo routes to Singapore from Bhubaneswar and Hyderabad; Exit FIRST from Bengaluru and Kolkata as the airline shut down, Air India reshuffled its capacity – shifting the flights from Bengaluru to mainline Air India from Air India Express.
Why is it only likely to grow from here?
Vistara’s merger with Air India and subsequent investment by Singapore Airlines will see the two airline groups work more closely with Air India likely to use the Singapore Airlines hub at Singapore as a gateway to points in Indonesia, Vietnam and Australia where it does not fly. -stop and likewise Singapore Airlines using Air India’s three hub strategy in Delhi, Mumbai and Bengaluru to feed flights to Europe and points in North America.
With robust plans like these, it is unlikely that any of the airlines would want to go below 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.
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Published: 07 Mar 2024, 10:58 IST