AirAsia Drops 4 Indian Routes

Saturday, 15th February 2014 at 07:49am

Starting March 1 this year, Thai AirAsia will have its final flights between Kolkata and Bangkok reportedly due to escalating airport fees.

In the past four years, the AirAsia group already stopped flying to three Indian cities citing unprofitability as the primary reason. AirAsia ceased operations between Hyderabad and Kuala Lumpur in 2011 while its long-haul unit, AirAsia X, ended its services between the two major Indian cities, New Delhi and Mumbai, and the Malaysian capital.

AirAsia is noted for its business philosophy in opening routes, doing test operations for one year to find if it's profitable enough to sustain its operations and abandon it completely if it fails to meet its expectations.

The four Indian routes AirAsia had served were not entirely unprofitable as the load factor of its inbound flights (from India) always hovered between 80 and 85%. The only thing the airline worried too much was the inbound flights (to India) whose load factor was only 70% or less which the airline officials said is not sustainable enough considering the distance flown. The load factor even dipped lower during off-peak months of each year which stretch to more than 6 months at a time.

While AirAsia group services to Indian cities contracted, Indian carriers are expanding their operations to Southeast Asian cities in recent years. Jet Airways, for example, reported an average load factor of 82% for its operations to Southeast Asian destinations during the last fiscal year, 2012-2013. It is expected to keep that level for the current fiscal year. IndiGo, a low-cost and the country's largest carrier, is even reporting a much higher load factor in the last fiscal year averaging 85% for its operations to Bangkok and Singapore, two of the region's most popular destinations among Indian tourists.

India's flag carrier, meanwhile, posted a modest load factor for its Southeast Asian operations, averaging between 75 and 80%, making it sustainable enough to keep its business going and even expanding its operations there.

Currently, AirAsia group jointly operates a total of 64 weekly flights between India and Southeast Asia. A little more than half of these flights are operated mainly in two southern Indian cities, Thiruchirapalli and Chennai with primary connections to Thailand and Malaysia.

Jet Airways is, by far, the largest carrier to serve the routes in terms of capacity with 85 weekly flights between India and Southeast Asia, mainly to Bangkok and Singapore. Air India, on the other hand, offers 49 flights per week to the same two Southeast Asian destinations.

Other Indian carriers who are expanding operations to Southeast Asia include IndiGo, SpiceJet and Air India Express.

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