Air India, India’s largest international carrier by available seat kilometers (ASK), is expanding its international network with new flights to Phuket, Thailand. The airline will begin operations to Phuket from 15 December 2023, with four weekly flights initially, increasing to a daily service from 8 January 2024. Phuket is the first of four new international destinations that Air India plans to launch by the end of March 2024. .
Head of Visa Free Travel
Thailand has added India to its list of visa-free countries, effective from November 10, 2023, until May 2024. Currently, four Indian carriers, four Thai carriers, and one Bhutanese carrier operate direct flights between India and Thailand. However, IndiGo remains the only carrier offering flights to Phuket.
With an affordable and easy to obtain visa in advance, including an “on arrival” option, Thailand has always been a popular tourist destination. By introducing visa-free travel, Thailand secured renewed attention and consolidated its position as a mass tourism destination.
Read also | Thailand extends visa-free entry to Indian and Taiwanese tourists for six months
Delhi as the Air India Hub
Air India has an advantage over IndiGo in terms of transferring passengers, as all its operations are under one roof. However, for international-to-international transfers, both airlines stand on equal footing.
Seven of Thailand’s top ten source markets are Asian countries, with the remaining three being Germany, the UK and the US. None of these three countries have direct connections to Phuket, apart from seasonal charters from the UK.
This traffic is currently handled by Middle Eastern carriers. Air India’s times offer competitive two-way connections from London to Phuket, while connecting flights from other European and American cities have long layovers.
Taking IndiGo
With its Phuket expansion, Air India has clearly signaled its intention to take on IndiGo, the only airline offering non-stop flights from Delhi to Phuket.
On average, 5,000 passengers fly non-stop between India and Thailand every day. About 200 passengers fly non-stop to Phuket from Delhi, while the rest connect via Bangkok or use alternative modes of transport. Air India’s offer allows passengers to combine multiple destinations without changing airlines.
Read also | IndiGo, Air India to source parts locally
Air India will seek an advantage over IndiGo through its inter-line arrangement with Bangkok Air.
Significantly, Air India is entering a small, monopoly-controlled market currently dominated by IndiGo, which has a cost advantage over Air India and offers more frequencies and destinations in Phuket and Thailand.
If this expansion strategy continues, Air India could also launch flights to Phuket from Mumbai.
Tail Note
The new flights will add to the existing 265 weekly departures between India and Thailand. The Air India group plans to introduce one new aircraft every six days, enabling rapid expansion within India and beyond. The Phuket launch indicates Air India’s willingness to challenge IndiGo.
Most Read | IREDA IPO: What GMP, subscription status signal? Donation date, how to check status
Moreover, Air India is moving beyond its cautious approach and embracing bolder options.
This suggests that we can expect further regional expansion from Air India in the coming days. The airline’s ability to balance its full-service and low-cost offerings (Air India Express) will provide further insight into its plans to take on IndiGo. Currently, Air India has left AIX to pursue domestic route competition with IndiGo. Its recent additions of flights to Mangalore from Bengaluru, Hyderabad to Lucknow, or Bengaluru to Trivandrum have broken IndiGo’s monopolies. With Phuket, the same strategy extends to international routes.
Air India’s charges are higher than IndiGo’s. Will it attract a sufficient mix of business and economy class passengers to offset these higher costs? Will transit passengers offset the higher costs? These are the risks Air India faces as it goes head-to-head with IndiGo. A cost advantage may never materialize, but a near-level playing field is essential for the next few years. Can expansion wait until then? Clearly, it can’t, and Phuket is just one of many new stations and routes on the horizon.
Ameya Joshi is an aviation analyst.
Milestone Warning!Livemint tops charts as the fastest growing news site in the world 🌏 Click here to know more
Catch all Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates and Live Business News.
More or less
Updated: 25 Nov 2023, 10:26 IST