The large population and growing economy of India has in recent years become increasingly important for thw world economy as well as for the aviation industry. Indian expats around the world and especially in the United States have become important passenger flows for large airline hubs in the Middle East and Asia. However, the question has for long been when there will be more direct flights from India to distant destinations – and when this happens, what will then happen to the big hubs who have benefitted from the growing passenger flows in and out from India?
A recent article in Times of India (link below) has brought up this issue. This time it is related to the airline Vistara, a joint venture between Tata and Singapore Airlines. The airline has announced that it may adapt a few of its remaining B787s on order for direct flights to North America. At this point it is only Air India that performs direct flights to the U.S. and the old “Maharaja” (the name of the mascot for Air India) has been in a problematic state for many years. The Indian government has in recent years tried to find a buyer for the airline, but there has been no bidders (among other reasons this has been due to that a deal has included taking over the airlines debt, required protections for staff etc.).
Acoording to the article the market has changed partly due to COVID-19, which has prompted a need for direct flights rather than via hubs that may complicate transfers and require extra doumentation. This may coincide with a growing demand for direct flights on the Indian market and airlines in India will surely see opportunity in trying to meet this demand. As of last year Air India operated eight flights from India to the US (5 from Delhi, 2 from Mumbai and 1 from Bangalore), United operated two flights and Delta one. As the industry will return to growth when the pandemic fades away there certainly seem to be room for more airlines to compete on this market, especially given that there is no competition from any other Indian airline in the current setup.
All of this may be the start of a trend that will grow in coming years. Countries in Asia with a growing economy and a developing airline industry may see passenger flows that support direct flights to more far away destinations. Another current example is Bamboo Airways aiming to fly direct between Vietnam and Europe with a long haul – low cost offering (link). The question will however remain if there will be airlines that can capitalise on this by offering a competitive experience in terms of aircraft, service and price. Although many passengers may prefer direct flights these may always be limited to a few major destinations. The competitive advantages of the large hubs may thus still provide an attractive option. The development in India can point towards where this specific aspect of the battle between hubs and point-to-point will go in times ahead.