IndiGo’s envy, Air India’s pride: The GCC network of Air India Express

Air India express was set up in 2005 as the low cost arm of Air India, focused on building connectivity from Kerala and the south to the Middle East markets. It was based in Kochi until recently and has built a smart and deep network serving the south of India with direct connectivity to the GCC countries as well as to Singapore, serving the ethnic and migrant communities in both locations. It flies point to point services between multiple points in the gulf to varied Indian cities, sometimes with low frequency and until recently with daily varying schedules. It has with the recent augmentation of fleet, standardised many departures and is now the connectivity leader for these markets. Per press reports, it is also profitable stand alone.

While there is extensive conversation about the transformation needed and happening at Air India, is Air India Express the jewel that has gone unnoticed?

Let’s take a look at the Air India Express network

All data is for the middle of March with only destinations with 1 daily departure or more considered.

* Hyderabad to Jeddah route starting March 1, Lucknow to Dammam and Muscat starting Mar 15 

Surprise, Surprise!

The first surprise in the list is that none of the top 5 destinations for Air India express are from the top 6 airports of India. Its busiest airport with the widest breadth of departures is Kozhikode airport (CCJ) and 5 of the top 6 airports are on the Malabar coast stretching from Mangaluru to Thiruvananthapuram. Indeed, thanks to Air India express, Kozhikode is the 3^rd biggest international airport for the Air India group by way of daily departures and destinations served. Tiruchirapalli is the only destination that has flights to both the Middle East and southeast Asia (Singapore, served twice daily).

Air India express is not shy of flying to destinations only once or twice a week – for example Salalah (SLL) in Oman or Al Ain (AAN) in the UAE, both served with two weekly departures. The network out of other Indian cities is largely to the Middle East (Dubai and Sharjah lead with 11 daily departures each) with the exception being Chennai and Madurai, both of which are connected to Singapore (4 daily departures). The contrast with the Indigo international network is instructive – Indigo is a more metro centric network with for instance only 2 daily departures to 2 destinations from Kozhikode or one departure each from Thiruvananthapuram and Tiruchirapalli. The only two destinations where there is a head to head battle are Kochi (six daily departures for Air India Express compared to five for Indigo) and an emerging battle in Hyderabad where Air India express covers two (soon to be three) destinations and Indigo 13. Air India express also has very little overlap with other airlines in the Air India group with only four overlapping routes – Kochi to Dubai and Doha, Mumbai to Dammam and Chennai to Singapore. The longest route on the Air India express international network is from Hyderabad, Kozhikode and Kannur to Jeddah while the shortest route is from Mumbai to Sharjah.

Future evolution of the Air India express’ International network

At the brand relaunch in October, Air India express had showcased an ambition of greater connectivity through increased regional flying and per recent media articles has an ambitious and aggressive fleet expansion plan (scaling up from 64 aircraft to 180 aircraft within 5 years) and a market share ambition of 20% in short haul international versus their 11% today.

We believe this would imply 2 imperatives

1. Doubling down further on the Middle East and SouthEast Asia markets (subject to bilateral rights) as Air India express defends its turf vs both Indigo and Akasa – which will start international services to the gulf soon per press reports. This would involve further strengthening the South India operation with more frequencies to more destinations (e.g. to Dammam which is a free port with no bilateral restrictions) and opening up new ports of call with strong ethnic /migration links to India – for example Malaysia and Sri Lanka which have large Tamil speaking populations.
2. Beyond its current bastion in the ethnic market, to meet its market share ambition, Air India express will possibly have to diversify its addressable market. Two possible opportunities if one looks at the Indigo network as a benchmark are
   1. Leisure market from metro cities in India to destinations like Bangkok, Phuket, Vietnam or Male
   2. International to International traffic via India – in this case by building connectivity to other sources of Middle East origin traffic like Indonesia, Philippines, Bangladesh and Nepal
   3. Indigo has built a sizable presence in both these markets, for instance offering Jakarta to Jeddah or Dhaka to Dammam connectivity as also Delhi and Mumbai to Phuket and will be a formidable competitor in both these markets.

Air India express also has a strong domestic market share ambition of 15-16% (doubling versus its current share of 8%). In a rapidly growing domestic market, this would mean that new capacity will be evenly distributed between further international expansion and domestic growth, possibly slightly tilted towards domestic expansion. The airline is already operating as a feeder to Air India with a codeshare between Air India and Air India express. Will Air India express remain a point to point operator or will it at some stage open up a hub to connect its growing domestic operation with its wide portfolio of Middle East and south East Asian destinations. In particular, what will be the role of Bangalore which is Air India Express’ leading domestic departure base but not yet connected internationally by the same airline.

The future is certainly bright and exciting.

About the author: This guest contributor is an aviation enthusiast whose day job is in consumer goods. A frequent flyer (1300 + flights logged) and a data geek with a love for analysing airline networks and their evolution. On X (Formerly Twitter) and other platforms as @BOMLHR

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