The Hindu Business Line : IA gearing up to face competition in Gulf-India sector — Upbeat on Sharjah-Mumbai daily operations

Airlines on the Gulf sector will this year be under tremendous pressure due to the entry of a number of new carriers in addition to skyrocketing fuel surcharges, he said.

Abu Dhabi , May 10

INDIAN Airlines, which posted good revenue and passenger growth in the Gulf region for 2004-2005 fiscal, is upbeat about the excellent response to its recently launched daily Sharjah-Mumbai operations and is taking appropriate steps to face competition from new budget carriers on the Gulf-India sector, according to a senior official.

Mr Pankaj Srivastava, the Dubai-based Regional Manager, Gulf, Indian Airlines, told Business Line that the revenues of Indian Airlines from the UAE grew by 2.1 per cent and from the Gulf region, by 2.7 per cent, between April 2004 to January 2005.

The highest growth of 10.8 per cent was achieved in operations out of Qatar followed by 7 per cent in Oman. The passengers from the UAE grew by 4.3 per cent and from the Gulf region by 5.7 per cent.

Mr Srivastava said that IA was able to achieve one point increase in seat factor from 72 per cent to 73 per cent during 2004-05.

The airline carried 1,068 passengers per day during 2004-05 from the region, he said. The official was optimistic about the airline's projections for the current fiscal despite the recent entry of two budget carriers — Air India Express and Air Arabia, on the Gulf-India sector.

"I think the market is so big, there is room for everybody. Our aim is to remain watchful and ensure that we retain our market share. In fact, we see the entry of these carriers as an opportunity, as business class travellers are expected to switch to other airlines operating on this sector," he said.

Further, in the peak season, fares of regular operators are almost on par with budget carriers, with the added advantage of more baggage allowance, he pointed out.

On whether IA plans to reduce its fares to cope with the competition, Mr Srivastava said that the Gulf is an extremely price sensitive market and all airlines base fares on market driven forces.

However, it is unlikely that regular operators will drop fares to unviable levels, he said. Airlines on the Gulf sector will this year be under tremendous pressure due to the entry of a number of new carriers in addition to skyrocketing fuel surcharges, he said.

IA's launch of direct operations between Sharjah and Mumbai in late March this year had received tremendous response and the airline was carrying good loads on a daily basis, the official said.

The increase in frequencies on Sharjah-Amritsar and Sharjah-Lucknow routes were also expected to boost passenger loads in the coming season, he said.

The airline, which operates 53 flights a week out of the UAE and over 30 flights from the Gulf states of Kuwait, Bahrain, Qatar and Oman, does not plan to add more destinations on the India-Gulf sector till additional capacity is available with the arrival of more aircraft, Mr Srivastava said.

However, IA plans to operate extra sections on the UAE-India sector in the forthcoming summer peak season, he added.

Among the attractive incentives that IA offers on the sector are add-on fares on the immediate domestic flight which enables the passenger to reach any corner of India and also special fares to destinations in the South-East Asia.

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