How Can Amritsar Play A Vital Role In Turning The Fortunes For Air India?

By Singh, Published on November 11th, 2022 in Blog, News

Located in the Northern Indian state of Punjab, Amritsar, could be a secondary city of India, but yet it is now challenging the potential of even the major cities across India, for a number of air travel markets, whether it be the UK or Italy in Europe or even Canada in North America.

As the new Air India under the Tata Group continues to expand its domestic & international network and strengthens its presence in major markets around the globe, the airline is now reflecting its full confidence and is steadily expanding in the market of Amritsar.

Air India, which once gave Amritsar it’s glorious golden days in the 2000s, seems to be right on the way to revive those days, after more then a decade. But what were those glorious golden days of Amritsar? How Air India become the victim of its own policies? How the new Air India is now capturing Amritsar’s international markets, and why this could be the best decision?

The Glorious Golden Days of Aviation In Amritsar

Amritsar has always been one of the top destinations across India for United Kingdom, and Canadian travel markets since 1980s, as these are the countries where majority of Punjabi diaspora is settled.

In the year 1982, Air India for the very first time launched direct services between Amritsar and Birmingham with its Boeing 747 Jumbo’s. This route was said to be the one of the most popular routes for Air India during that period. However, in the mid-1984 due to various socio-political & security reasons, the airline had to suspend this route.

After about 21 years of suspension of this popular route, the airline in the year 2005 launched direct flights between Amritsar and Birmingham, further connecting Toronto with its newly inducted Boeing 777s.

With even an developing market between Amritsar and the UK & Canada during this time, the route was said to be the one of the most profitable routes for the airline in its history. The word ‘profitable’ was unfortunately a rare thing for the airline during those years as well.

In the year 2006, probably looking at the success of Air India in these markets, the other full-service Indian carrier, Jet Airways also entered the Amritsar-UK market, by launching non-stop flights between Amritsar & London Heathrow using its state-of-the-art Airbus A330-200 aircraft.

But what the data has to say about Air India’s Amritsar-Birmingham/London-Toronto and Jet Airways Amritsar-London routes?

As per the data available, in the FY2006-7, over 74,977 passengers flew on Air India’s ATQ-BHX-YYZ flight, with 36,145 to Birmingham, while 38,832 to Toronto. Jet Airways, which began its thrice-weekly non-stop ATQ-LHR route in August 2006, had over 47,887 passengers.

In the upcoming FY2007-8, over 80,385 passengers flew on Air India, with 32,574 to Birmingham and 47,811 to Toronto. Jet Airways as well established a strong presence in this market, with over 80,106 passengers between Amritsar and London. In the FY2008-9, Jet Airways, however suspended the ATQ-LHR route, while in October, Air India rerouted the ATQ-BHX-YYZ route as ATQ-LHR-YYZ, to save its slots at Heathrow. However, there were over 14,235 passengers to Birmingham, 46,061 to Toronto and 80,082 to London.

In the FY2009-10 and FY2010-11, the demand for Toronto still remained stronger than London, with 119,477 passengers to Toronto and 98,033 passengers to London, in total, in both the financial years. These figures represents the fact that, even over 16 years ago, Amritsar was one of top-markets for the UK and Canada in India, when the population of the Punjabi diaspora in both the countries were minimal, as compared to today. It would not be wrong to say that, with over 500,000 indirect travelers annually between Canada and Punjab, today Amritsar is the most demanding market for Canada in India, leaving behind even Delhi, Mumbai, Bengaluru, etc.

However, while Amritsar was staring at an ever-developing future, the dark clouds were just hovering over the horizon. In the year 2010, due to introduction of various new policies by Air India to develop Delhi and Mumbai as their international hubs, Amritsar felt a grave negative impact on its international network and air traffic development. At the end of October 2010, the Amritsar-London-Toronto route was eventually suspended and rerouted via Delhi.

Air India: The Victim of Its Own Policies?

In the year 2013, Air India re-entered the Amritsar-UK market, but this time with new routing via Delhi. As a result, the new route economics didn’t turn out to be in the favour of the airline. The Amritsar-Birmingham route which was an exceptional route for Air India between the years 2005 and 2008, was rerouted as Amritsar-Delhi-Birmingham. After route changes, just in the first 10 months of the FY2014-15, the airline reported a loss of over Rs.125 crores on this route, as reported by Hindustan Times (HT) in a news report.

Interestingly despite the loss of nearly $21.5 million than on this route, this was one of the least loss-making routes for the airline. The report by HT also stated that the airline during the same time period, reported a loss of over Rs. 150 crores or about $25.8 million than on Delhi-Rome/Milan routes, Rs. 300 crores or about $51.7 million than on the Delhi-Melbourne/Sydney routes, while on Ahmedabad-Mumbai-Newark route the loss was over Rs. 430 crores or about $74.1 million than.

While Air India wanted to emerge out as a large international network carrier flying of its hubs in Delhi and Mumbai, it could be said that they had to pay a huge price for this decision. The point-to-point routes, including the Amritsar-Birmingham-Toronto route, which was said to be the one of the most profitable for the airline, were eventually axed due to the introduction of its Hub & spoke policy.

Air India’s Wager On Amritsar- How Far Can It Go?

As part of Air India’s recent long-haul international network expansion, Amritsar emerged as a strategic point for the airline, as it ramped-up its non-stop services to the UK from the city.

With over 3x weekly non-stop services each to London & Birmingham, Amritsar is now Air India’s 3rd largest market for UK, by capacity deployed, behind Mumbai with 12x weekly services and Delhi with 17x weekly services.

The Amritsar-Birmingham & London routes which were launched by Air India in the year 2018 and 2019 respectively, were termed more of “Political Routes” until ownership of Air India was in government hands, but with the decision to continue and further develop these routes, right from the takeover of the airline by the TATA group, it seems that Air India has certainly got some big plans for Amritsar in its future network expansion. But how are these routes performing right now?

As per the traffic data released by the UK Civil Aviation Authority (UK CAA), between January-August 2022, Air India has experienced an great average Passenger Load Factor (PLF) on both routes to London Heathrow and Birmingham from Amritsar.

In the 7 months, there were over 33,401 non-stop passengers between Amritsar and London, with the average PLF on this route at 82.62%. The March was the strongest month with the average PLF at 88.44%, while May being the weakest at 73%.

The Amritsar-Birmingham route had over 15,115 non-stop passengers, with the average PLF on the route at 85.60%. January was the weakest month with the average PLF at 77.25%, while February being the strongest with PLF at 93.99% Note: Air India operated 1x weekly flights on ATQ-LHR route between January-March, while increased the frequency to 3x weekly from April. ATQ-BHX continued to operate 1x weekly.

Making The Presence Felt

The airline doesn’t just have its eyes on Amritsar’s UK market, but yet even on it’s North American and Australian.

In a aim to capture a significant proportion of Amritsar’s large North American and Australian traffic, Air India will now also be expanding it’s non-stop services between Delhi and Amritsar to 3x daily, for a seamless connectivity between Amritsar and it’s North American network, especially Toronto, Washington D.C. and Newark, New Jersey, while Sydney and Melbourne in Australia.

It is evident to note that, these are not just random connections for Amritsar, but they connect to North America and Australia, which are big air travel markets for Amritsar. This represents the fact that, Air India is focusing on these markets, it further needs network expansion to capture the market share it has been bleeding out to foreign carriers.

Why This Could Be The Best Decision?

It is open secret that the state of Punjab has one of the largest Non-Resident Indian (NRI) diaspora settled across the globe, mainly in the countries across North America and Europe particularly in USA, Canada, the United Kingdom & Italy.

With the Punjabi population number going over 1.2 million in the United States and 2 million in Canada respectively, there are estimated 800,000 indirect travelers between Punjab and North America every year.

It is notable to mention that due to limited one-stop flights and non-availability of direct connectivity between Amritsar and North America, huge passenger traffic is forced to travel via Delhi only, thereby benefiting the Middle Eastern, European, and North American carriers the most.

Amritsar is probably the only major market in India, which gives a direct advantage to Air India to have monopoly on all its non-stop routes to North America and Europe from Amritsar, as it’s a highly bilateral constrained airport for the Middle Eastern and European Carriers, along with the inability of other Indian carriers to look at expanding into these markets in the present scenario.

As the airline transforms itself into a carrier of choice globally, Amritsar could play a pivotal role for the airline to support in its future growth plans. Developing Amritsar as another gateway to India for North America and Europe, would let the airline capture a significant proportion of the market share, and make a stranglehold over it.

Amritsar is one of those travel destinations where airlines can do wonders both domestically and internationally, but that can only happen if they do it right way.

About The Author

Ravreet Singh is a young blogger with an avid interest in aviation business. His ultimate goal is to become an Airline Business Professional. He possess good research, analytical and strategy skills, along with knowledge about various aspects of commercial aviation. He is also the youngest team member of FlyAmritsar Initiative, a public advocacy campaign for better air connectivity & sustainable development of Amritsar.

Email: ravreetsingh15.rs@gmail.com

• Twitter
• LinkedIn