Indian aviation takes off — via the Gulf

India is taking to the air, and it is increasingly using the UAE’s two global airlines, Emirates and Etihad, to do so.
This will not come as news to anybody who has traveled to the US recently. On two recent summer flights to New York, Indian passengers formed a big majority in economy class, most of them on codeshare tickets from Jet Airways, India’ second biggest airline measured by destinations served. Both Etihad and Emirates have codeshare deals with Jet.
I didn’t have the chance to see the demographic of business class, but it must have been similar, given rising Indian income level and business activity.
A recent bit of research by CAPA (reproduced in Emirates’ government affairs journal Open Sky) declared that India was to become the third largest aviation market in the world, replacing Japan currently in that slot and behind only the US and China. India is already in third position in terms of domestic passenger traffic.
A separate study by the International Air Travel Association estimated that by 2030 Indian air passengers would total 442 million flyers, up from 159 million last year, would support 19 million jobs in the country and contribute $172 billion toward its economy.
Statistics on the international market share gives a breakdown by airline. Jet flew most passengers out of the country, with 13.7 percent of the total, followed by Air India with 10.4 percent. Then came Emirates with 8.7 percent. Etihad was unable to give a figure in time for publication, but the Abu Dhabi airline must be a significant part of the remaining 67.2 percent.
Both Air India and Jet have expanded their worldwide services in recent years, but most of the recent growth has been on US routes, for several reasons.
The first is the growth and increasing globalization of the Indian economy. As Indian businessmen look outwards, they naturally seek to do business with the biggest economy in the world.
Permanent immigration follows business trips. Indians have focused on skill-sets that seem to appeal especially to American demand, largely in the fields of medicine, information technology and finance. Much of the Indian trans-Atlantic traffic is from the families of doctors, dentists, computer specialists and accountants traveling to the US east coast and then flying on the Pensylvania, Texas or California, three big population centers of the estimated three million US citizens of Indian origin, according to the US Bureau of Statistics.
The US aviation industry has been slow to recognize this potential market. The three big carriers — American, United and Delta — barely serve the US-India routes. They claim that the Gulf carriers have driven them out, but cynics suspect the real reason is that they have such easy picking from the US domestic business that they can’t be bothered to look further afield.

Emirates and Etihad are well positioned to capture the projected increase in passenger traffic between India and North America with their US rivals slow to appreciate the potential market.

Frank Kane

Much as they have done with the Middle East and Africa, the US airlines appear to be putting “America First” by ignoring the huge markets outside the US. 
Another big reason for increased India-US travel is that it’s so much easier and cheaper to get there, and this is where the UAE carriers come in. You can fly from Mumbai to Newark, New Jersey for as little as $1,291 return on an Air India non-stop.
A Jet code-share with Emirates is a little bit more expensive, at $1,445 return, but for that you get premium standards of service on board Emirates for the majority of your trip. You can also get a pleasant stopover in Dubai or Abu Dhabi, where the retail facilities are much better than at home.
In Abu Dhabi, there is the additional lure of visa pre-clearance for entry into the USA. This must be a big attraction, as anybody who has sampled the chaos of immigration at JFK airport in New York will testify.
You simply sail through the US immigration process as if you were a domestic US traveler, which is a big advantage. The downside, however, is that you then have to wait for your luggage by a belt that is also delivering items from Boston, Los Angeles and Cincinatti. But that’s probably worth it to avoid the attentions of a New York immigration officer.
The Indian market can only get bigger, as second tier cities open up as feeders for the UAE hubs. Etihad would seem to have the upper hand here, serving more Indian destinations than Emirates and with its 24 percent equity holding in Jet. But who knows how that relationship will fare under the new strategy at the Abu Dhabi carrier?
The Indian government last year announced a strategy paper to develop its aviation industry in line with the rising expectations of its people. More government aviation initiatives are required, notably to construct more “open skies” deals with its closest partners.
• Frank Kane is an award-winning business journalist based in Dubai. He can be reached on Twitter @frankkanedubai