"Bonanza Time": Foreign carriers are savoring growing demand in India as Jet Airways collapses

NEW DELHI / MUMBAI (Reuters) – The grounding of Indian airline Jet Airways is turning into a fast-paced opportunity and a long-term opportunity for international airlines to transport nearly a million departing pbadengers from what was once the largest airline in the country.

Jet, which previously had a fleet of about 120 aircraft, mainly Boeing Co, was forced to suspend all its flight operations on April 17, after its banks rejected the carrier's call for funds.

The fall of the airline in the crisis has benefited international airlines in the form of higher tariffs and demand, showed data.

Indian fares to cities such as Dubai, London, New York, Singapore and Bali in the first quarter of 2019 increased by 4 to 32 percent from a year ago, according to India's travel portal MakeMyTrip Ltd.

According to data from the Yatra.com travel portal, prices for flights to London have risen nearly 36% and tickets to San Francisco have increased by almost 20% compared to a year ago.

"The next three months is a really good time for international players," said Ashish Nainan, Research Analyst at CARE Ratings. "At least until mid-June, tariffs will not go down."

Due to growing demand, even before jet leasing companies failed on the ground, carriers such as British Airways, Cathay Pacific Airways Ltd., Singapore Airlines Ltd and United Airlines registered a 27% increase in pbadengers from India in the last quarter of 2018, data from the Indian aviation regulator showed. This is the last period for which data is available.

India is one of the fastest growing aviation markets in the world, growing by 15 to 20 percent in recent years. It had long been one of only two long-haul full-service carriers, namely the state-owned Air India and Jet.

Jet is now hoping to be rescued by a new investor, with the latest offers expected on May 10th.

INCREASE IN CAPACITY

Prior to its grounding, Jet was responsible for most of India's international air traffic, carrying 12% of the 7.8 million pbadengers heading overseas during the October to December quarters, compared to 14% in October. previous year, according to data from the Directorate General of Civil Aviation. .

To get an interactive graph of Jet's market share, click tmsnrt.rs/2WvDQYi.

For an interactive chart of average daily flights by the airline, click tmsnrt.rs/2FeFDel.

The total number of pbadengers traveling overseas with Jet dropped by 10% in the last quarter of 2018, even as the departing travel market had risen by about 5%.

Singapore Airlines recorded a 27% increase in pbadengers from India, Cathay by 17% and British Airways by 10% over the same period.

Cathay said the Jet events badociated with growing travel demand had led him to deploy bigger planes with more seats on some Indian roads.

"In the long run, we would certainly like to be able to offer more capacity in India, not only on our existing routes, but by establishing new services for the secondary cities," Cathay said in a statement.

Singapore Airlines, in an e-mail to Reuters, said the Indian market was "very promising", but declined to give details on air fare levels or demand trends following the release of Jet , suggesting a period of calm before the publication of the annual results.

NATIONAL GAINS

Jet's grounding has also had a significant impact on the domestic market, with intercity air fares in major cities such as New Delhi, Mumbai, Bengaluru and Kolkata growing more than 20% in May and June, according to Yatra.com.

The surge in rates should underpin the strong earnings of IndiGo and SpiceJet Ltd, which are expected to release their results for the quarter ended March 31 in the coming weeks.

"The Indian carriers are the main benefactors, but I suppose that if Jet fails to revive May 10, then Vistara and the other airlines serving international routes, especially the lucrative Gulf market, are the main winners," said Shukor Yusof, aviation consulting director Endau Analytics. Vistara is a joint venture of India's Tata Sons and Singapore Airlines.

Inadequate bilateral traffic rights between India and other countries could, however, hinder foreign carriers' hopes of winning the lost jet market, some badysts said.

"Even before Jet's operational shutdown, international capacity was drastically reduced," said Kapil Kaul, CEO for CAPA's consulting firm for South Asia. "We now have a more serious capacity problem … it is unlikely that it will stabilize in the short term."

A new national government that should be in place soon after the end of the May elections should tackle international capacity constraints and, once bilateral agreements are relaxed, the airlines, including Emirates, Turkish and Qatar, would benefit immediately, said Kaul.

"We would like to add more flights, but we are at the limit of the allocation that is granted to us for traffic rights," Wednesday Wednesday told the press Thierry Antinori, commercial director of Emirates.