Air India, Indigo or Emirates – Who Leads International Traffic Out of India?

Last week was interesting. Centre for Aviation (CAPA) released a report on Indian aviation. In this report, they claimed Indigo – already the largest domestic carrier in India – was the largest international carrier too.

Air India – the national carrier – was incensed by this. There were letters and tweets thrown around.

Background

On August 24, 2019, several media houses in India published a story on a report released by CAPA. While the report is not in public domain (at least not for free), the key findings were presented. CAPA claimed that Indigo has beaten Air India to be the largest player in international traffic to / from India. As per the report, Indigo owned 11.7% of capacity. Air India, the second largest player, had 11.4% market share.

You may wonder why this is significant. There are two reasons. First, India with its burgeoning middle-class is a huge aviation market. As prices drop, visa restrictions ease and income grows, you will see millions of Indians travelling internationally every year. Second, Indigo launched its international operations only in 2011. It took less than a decade for the airline to become the largest carrier beating Air India which has been flying for several decades. Over the last few months, Indigo has been launching new international routes at an unprecedented rate.

Indeed, this achievement was helped with the fateful demise of Jet Airways.

Normally, the story would have ended here. But there was a twist.

Air India, challenged the report from CAPA. In a strongly worded letter, Air India stated that the methodology used to calculate market share is flawed. It stressed that the report calculates market share by seat count. While the globally accepted methodology to calculate market share is through Available Seat Kilometers (ASK or ASKM).

Source: Tarun Shukla / Twitter

As per Air India, it is the clear leader in international segment with a market share of 16.7%. Indigo, the second largest player, is at half of Air India’s market share. This is because Air India flies to several long-haul destinations (Europe, USA, Australia) while Indigo flies primarily to South East Asia and Middle East.

My Thoughts

It is hard to disagree with Air India. The airline rightly notes that ASK is the usual metric used to calculate capacity and market share. However, as the response from CAPA mentions, the report clearly says that the calculations are done on seats.

However, it is also a fact that sooner or later Indigo will overtake Air India in ASKs too. It is in a better financial condition, has plenty of planes on order and is growing at a significantly faster rate. While you can appreciate Air India for contesting the report, it is only a matter of time.

One thing I loved about Air India’s response was the data it provided for free. You can see ASKs for the Top 25 airlines in India. I know people who would have paid good money for this data 🙂

But You Mentioned Emirates You Clickbaiter?

So where does this leave Emirates? As the letter from Air India mentions, Emirates is the third largest player and the largest non-Indian player. It has an ASK of 1.4 billion in a month.

My ‘back-of-the-envelope’ calculations yield a similar result. As I had previously calculated, Emirates flies approximately 73,000 seats weekly to and from India. If you take the average flying distance 2,300 kilometers from Dubai to India, you would get an ASK of 1.44.

However, there is a major issue with this analysis. Unlike Air India or Indigo, Emirates does not fly point-to-point. Indians who fly by Emirates go to several destinations including Los Angeles (13,000 km), New York (11,000 km), London (5,500 km) etc.

In fact, as per a recent report, 63% of the passengers at DXB airport are in transit. In fact, only 8% of the passengers leave the airport and explore the city.

Let me explain this using an example. Let us say you are flying from Mumbai to New York via Dubai on Emirates. The data given by Air India records only the first leg of your journey – 1,940 km. The second (and longer) leg of your journey is not recorded. In reality, you are flying 12,900 km (Mumbai – Dubai – New York).

So, how do we get an approximate representation of true ASK for Emirates?

I assume that an average passenger flies from India to London on Emirates. Adding 5,500 km to 63% of the transit passengers, I get an overall ASK of 3.5 billion. Note that I have not added flydubai or Spicejet. Emirates has codeshare arrangements with both. To be fair, Air India does not add Air India Express either.

At an ASK of 3.5 billion, Emirates turns out to be the second largest player and a very close competitor to Air India.

What do you think? Comments are welcome.