Carriers mull free link for travel abroad

AI, Jet to leverage the extended domestic networks to offer small city flyers free connectivity.

Air-India and Jet Airways are planning to leverage their extended domestic networks following a merger (with Indian Airlines) and acquisition (of Air Sahara), respectively, to offer small-city travellers free connectivity for their international flights.

This could mean a saving of 10 to 25 per cent over the combined tariffs for passengers in smaller cities flying overseas, depending on their final destination. Small towns account for 25 to 30 per cent of passengers travelling overseas.

In effect, a passenger travelling from, say, Nagpur to Singapore via Mumbai will not have to pay for the Nagpur-Mumbai leg.

"The overall cost of flying from a non-metro city will come down if he or she opts for a connecting flight on Air-India. The passenger can fly free to the big city from his regional location to catch the international flight," says S Venkat, executive director, Air-India. The strategy, he added, will ensure passenger load factor or capacity utilisation of aircraft.

Jet Airways, India's largest private airline, is also planning to follow this strategy by leveraging the domestic network of Air Sahara (recently renamed JetLite) for its international operations.

"By offering free travel for a connecting flight, we are earning incremental net revenues. This will ensure better load factor as well as greater loyalty. The cost of the short-leg route will be compensated in the long-haul international route," said a Jet Airways executive.

Indian Airlines, along with Alliance Air, flies to 49 non-metro places, while Jet Airways flies to 38 non-metro and small cities.

Industry experts say this model is already prevalent in countries like the UK where British Airways has a large domestic presence. "Airlines are keen to get better load factors on international flights, which yield better margins than short-haul domestic flights," says an aviation industry expert.

International carriers, of course, will have no option but to combat the challenge by pushing for point-to-point services from more cities, rather than only from metros.

"Bilateral talks between the Indian government and various nations are progressing. We hope that we will be able to start more flights from regional cities," said the executive of an international carrier.

Adds an executive of Singapore Airlines, "It is not possible to operate from all domestic points in India as we fly bigger planes. But we will be having more inter-line agreements with Indian carriers to compete better."