AirAsia India returns to Surat tomorrow

AirAsia India – now fully owned by Tata’s, is returning to Surat. Starting March 03, 2023; the airline will connect Surat to Delhi, Kolkata and Bengaluru. This is part of the mega plan which involves optimisation of the network following the full subsidiarization of AirAsia India in November 2022. The AirAsia India brand has to be retired by November 2023 as per the deal with AirAsia Bhd.

Surat’s brush with air connectivity is long and arduous, to say the least. The second largest city of Gujarat is in the top 10 in the country by population and is a diamond-cutting and polishing hub in the country. Surat airport brings back memories of the buffalo incident with SpiceJet but a lot has changed since then. While an airline had to rely on anecdotal evidence in the absence of empirical data in the past, Surat now has a lot of past data to know what has worked and what hasn’t. 

AirAsia had launched services to Surat in June 2018,  becoming the first carrier to offer services to Bengaluru from Surat. In August the same year, IndiGo – the market leader, jumped in. IndiGo came in with a barrage of flights. These were replacements and not new additions for IndiGo as it wanted to chase AirAsia India and was also undergoing a challenging fleet renewal situation back then. Ironically the fleet situation continues even now, largely driven by Pratt & Whitney powered A320neo family aircraft and supply chain issues of Airbus leading to delay in deliveries.

As for AirAsia India, Surat was one of the many stations which it opened and later closed. The re-launch of Surat for AirAsia India is part of the Air India – AirAsia India route transfer where in, Bhubaneshwar, Bagdogra and Surat will be exclusively served by AirAsia India and Air India has pulled out of those stations while Delhi – Vizag and Mumbai – Lucknow will be operated exclusively by Air India and AirAsia India has pulled out of these routes.

While Air India has vacated the station, Go FIRST has shrunk after having launched flights in November 2021.

Current connectivity

Air India will end its Delhi service later this month while Air India Express will continue its Sharjah operations. 

On the Surat – Bengaluru route, AirAsia India will break the IndiGo monopoly, with equal frequencies while to Delhi – it will continue to be a duopoly after Air India’s exit albeit with a very limited capacity. AirAsia India would be a monopoly to Kolkata from Surat with IndiGo expected to resume services in the summer schedule.

IndiGo also operates to Goa – Dabolim, Hyderabad and Jaipur from Surat, all of which are monopoly routes.

Both SpiceJet and Go FIRST have vacated the station, with SpiceJet expected to return in the Summer schedule.

Surat airport is undergoing expansion and modernisation and this will involve a parallel taxiway along with expanded terminal building which is likely to ease out terminal congestion. However, the current number of flights does not keep the terminal busy the entire day and there is scope to add flights at the non-peak times during the day.

Network Thoughts

It is unclear how IndiGo will respond to this but going by the past instances, it will be with additions to existing routes and launching new destinations. This addition helps in more ways than one. It pushes the travel agents to sell the airline across more routes since incentives can be achieved easily. While LCCs the world over focus on direct channel sales, the Indian market is still very much dependent on Travel Agencies, both online and offline. 

AirAsia India’s Surat operations may sound realistic but it does not have the muscle in the market with limited capacity and reach. The turnaround could come when AirAsia India completes its merger into Air India Express and the tickets are sold across group airlines. 

For now the integration is progressing well, with the airline having moved back to T2 at Mumbai from where other Tata group airlines work and being the first to move to T2 at Bengaluru. The airline has been operating from T3 at Delhi since inception. 

As for Surat, the city has had constant complaints with very high fares when airlines withdrew. The sudden spurt in flights in 2017-18 was not supported with as many passengers. With airlines leaving Surat, IndiGo had a near monopoly and that led to very high fares. Can Surat deliver on yields this time around? For an airline the choice for any city or slot usage is simple, what delivers better revenue – city A or B? The next two years will tell how Surat fits into the overall scheme of things for the Air India group.

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