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Understanding the Indian traveller could be profitable on new routes

The Indian aviation industry is booming. Analysis from Business Lounge, the market data arm of CiR, shows that in the ten months to October 2017 total PAX at India’s airports was up +14.9% [based on departure and arrivals PAX data for 27 Indian airports], a growth second only to Russia among the top thirty markets globally. 

“India’s rate of growth has caught the eye of many industry organisations, and it is certainly impressive considering its already significant scale,” says Garry Stasiulevicuis, Founder and President of CiR.

Growth in Indian passenger numbers

India is currently the fifth biggest market in terms of total PAX, sitting in between the UK and Spain, and behind the USA, China and Japan. While much of the growth is being driven by domestic travel, which accounts for over three quarters of total PAX and has grown +17.0% year to date, the international market also continues to record robust growth, up +8.8% over the same period. In October Indian airports registered their highest international PAX growth of 2017 so far, up +12.2% and is just the second time in 2017 that international PAX growth in India has broken double-digits.

“Although much of the focus of the headlines is the huge double-digit surges in domestic traffic, the Indian international market has also consistently posted healthy growth, and is showing no signs of slowing, which is excellent news for the industry heading into 2018,” continues Stasiulevicuis.

Delhi, the country’s top international airport, was the main volume driver behind October’s increase, handling almost 200,000 additional international passengers compared to the same month in 2016. Mumbai was also a significant growth contributor, handling over 170,000 additional international passengers, representing a growth of +18.0%.

The country’s smaller, regional airports have also been getting in on the action; Calicut and Kolkata saw high percentage growths, up +22.6% and +16.1%, with Tiruchirappalli also seeing growth of over +20%.

“As we have seen in other similar markets, such as China, while the main hubs remain central for international travel, tier 2 and 3 city airports are also experiencing rapid growth.”

Capacities to the global regions are in strong growth

In terms of international destinations, as a result of strong economic ties with the region, the UAE continues to be the top destination country. Capacity to MEA is up only +5.1% (although Africa on its own is experiencing +16.9% uplift), whereas seats to Europe and the Americas are currently +17.2% and +13.5% ahead of the same period last year, with seats into other APAC destinations also up.

New international routes driving traffic

Much of the growth to the Americas is being driven by routes into Canada. Air Canada’s Delhi-Toronto Pearson has historically been the sole link between India and Canada, however in October 2016 the Canadian national carrier launched a seasonal Vancouver-Delhi service, running through to April 2017 and, having proved a popular route, the airline scheduled the service to run again from October 2017. Air Canada also inaugurated a Toronto-Mumbai service, making it the first airline to operate a route between Mumbai and Canada.

“Air Canada looks keen to invest heavily in what it must see as a lucrative Indian market,” says Stasiulevicuis, “and it appears that there will be a significant opportunity to target Indian shoppers in Canada throughout 2018.”

Another destination region that has received significant investment, this time from both Indian and foreign carriers, is Scandinavia. Total capacity on India-Scandinavia route is up an impressive +174.4% in the six months up to June, driven by several new route launches in the last twelve months.

Last year Air India made its first foray into the Scandinavian market with a Stockholm Arlanda-Delhi service, swiftly followed in September by a Copenhagen-Delhi service. These two new routes have significantly increased the options for both Indian leisure and business travellers wishing to visit the region.

In November Finnair launched a seasonal Helsinki-Goa Dabolim, running through to March this year, making it ever more convenient for travellers from Goa, or indeed other areas of India’s west coast, to access Scandinavia.

“Airlines, both local and international, continue to finance new routes in and out of India, and these are offering opportunities to capture Indian shoppers in relatively unexploited markets such as North America and Scandinavia,” Stasiulevicuis asserts. “It is imperative for brands and retailers in these regions to understand how this key nationality behave in their airports in order to maximise the opportunity.”

How to understand the Indian Traveller

CiR’s Indian Traveller Report, launched in 2017, provides a focus on attitudes towards travel and the airport environment, together with an in-depth of study of shopping behaviour in Duty Free. The report reveals typical behaviour of Indian Travellers while travelling, including pre-trip research and the amount of time spent at the airport for shopping and other activities.

With recommendations to drive store footfall and conversion amongst this important traveller group, this report is essential reading for brands, retailers and airport operators.

For more information on the Indian Nationality Report, please contact CiR Research Director Stephen Hillam (stephenh@counterintelligenceretail.com)