London has long been at the top of most Indian airlines’ destination lists. However, the last few months have seen both Vistara and SpiceJet announce London flights, while Air India has operated the route for decades. So why are Indian airlines eyeing London so intently?
All about volume
London is a key market for Indian passengers. Passengers travel to the UK to meet friends and family (known as VFR traffic), education, tourism, and business purposes. These strong ties has made India a busy travel market for the UK, with over 690,000 passengers flying between the countries in 2019, according to Visit Britain.
These numbers have been quickly growing too. From 2016 to 2019, passenger traffic has gone up over 42%. With such strong growth in the London market, it’s not surprising why Indian carriers want to jump on the opportunity to start flights.
The UK is also home to a substantial Indian diaspora and Indian citizens who live and work in the country. Over 1.4 million people of Indian descent are British citizens, while 350,000 Indian citizens live in the UK. This large diaspora and Indian population has attracted substantial VFR traffic to the UK, a segment that could drive growth in the future.
Now that we know the volume of travel between the two countries, we can better understand why so many airlines are intently looking at London.
Flag carriers dominate
London is by far the most popular destination within the UK for Indian travelers, making up the bulk of the 101 weekly departures and 25,800 weekly seats on the India-UK route. Four airlines currently serve the direct India-London route: British Airways, Air India, Virgin Atlantic, and Vistara.
Of these four airlines, the two flag carriers, British Airways and Air India, dominate with a 79% combined market share, according to Visit Britain. This isn’t surprising since Virgin Atlantic only has flights from three daily flights and Vistara just started flights. However, it does explain why airlines are confident that they can pry some market share away from the legacy carriers.
It would be remiss to mention another important player on the India-UK route: the Middle East Three. The trifecta of Emirates, Etihad, and Qatar all draw substantial connecting traffic from India to London. These flights tend to be longer but passengers opt for them due to lower fares compared to the limited direct flights.
However, with lower fares and more competition on the direct routes, newer Indian airlines hope to capture this connecting traffic too. The ME3 have a formidable position in India, and it will be seen if Indian carriers can match their expansive network in India.
Low cost competition?
All four airlines currently flying between London and India all have one thing in common: they’re full-service airlines. There are no low-cost carriers on the route, despite Indian being home to multiple major ones (IndiGo, SpiceJet, GoAir, etc). However, this week SpiceJet changed this fact, officially launching flights from Delhi and Mumbai to London.
While IndiGo has also mulled flying to London multiple times in the past, it has never taken the leap. SpiceJet, however, has been much more optimistic and will start flights on December 15th. The airline is wet leasing Hi Fly’s A330neo, which has 371 seats, 18 in business and 343 in economy class. The wet lease is necessary since SpiceJet’s fleet of 737s cannot make the 9-hour, long-haul flight without a stop.
While SpiceJet might be a low-cost carrier, its fares do seem quite high. The airline is pricing a round-trip between New Delhi and London at ₹53,555 ($732). This price is actually higher than Air India, Virgin Atlantic, and Vistara on many dates, putting SpiceJet at a disadvantage as the newcomer in the segment.
For now, it seems it will be a while before we see an airline with low fares join the London route. However, if SpiceJet or anyone else does cut prices in the future, we could see some much-needed low-cost competition on the route.
Vistara making a mark
Vistara became the second Indian airline to start flights to the UK in August when it began its thrice-weekly new Delhi to London service. The airline was always targeting London as one of its first long-haul routes, and after delays, flights have finally started.
As mentioned, Vistara is also a full-service carrier and operates the route using its fleet of new 787-9s. The airline is likely hoping to challenge Air India and British Airways, using its premium product to attract business and leisure travelers alike.
While Vistara does have the newest business class cabin among its competitors, with a 1-2-1 configuration, it has struggled with low traffic during the crisis. Business traffic has been affected badly by the current crisis, which means it could be a while before Vistara manages to capture substantial market share.
Competition looms
London is undoubtedly an important market for Indian airlines, with bustling passenger and cargo traffic. While the current downturn has limited passenger numbers for the time being, when travel does pick up, we can expect intense competition and fare reductions. And as we know, more competition is always better for passengers.
We can also expect legacy carriers such as Air India and British Airways respond to the new entrants by dropping fares and pushing for lucrative business passengers. They have held the market for decades and letting go of it won’t be easy. For now, passengers can enjoy knowing that they have more options and lower fares than ever while flying to London!
Which carrier would you take if you were flying between India and the UK? Which airline do you prefer? Let us know your thoughts and experiences in the comments!
