Air India is targeting the Scandinavian market for growth as it introduces not one, but two new routes into the region during the second-half of 2017. The airline has confirmed it will launch flights from Indira Gandhi International Airport in Delhi to both Copenhagen and Stockholm as it seeks to take advantage of growing trade between Scandinavia and India.
Traffic demand between the three Scandinavian nations of Denmark, Sweden and Norway and India has grown 73.2% since the start of the decade with over 305,000 two-way O&D passengers flying in this market in 2016, according to data from OAG Traffic Analyser. Denmark is the largest market, accounting for 39.1% of this annual demand, just ahead of Sweden (37.7% share) and Norway (23.1% share). The Delhi- Copenhagen and Delhi – Stockholm markets are the two biggest city pairs, ahead of Delhi – Oslo, Mumbai – Copenhagen and Mumbai – Stockholm.
The European network growth is being made possible by the expansion of Air India’s long-haul fleet, namely the arrival of four additional Boeing 787-8 Dreamliners in the third and fourth quarters of this year. The carrier already operates 23 of the type, according to CAPA’s Fleet Database, having received its first aircraft almost five years ago in September 2012.
The arrivals will support a ramp up of its international activities with deliveries of the new generation jets having slowed over the past two years – after receiving 21 aircraft between 2012 and 2015, Air India has since added just two in November 2016 and January 2017, respectively.
The Delhi – Stockholm route will launch from August 15, 2017 and will be flown on a three times weekly basis. Passenger demand between India and Sweden has grown at compound average growth rate of 10.2% this decade and increasing business dealings and enhanced leisure demand between the nations has helped deliver this new route.
“A direct flight to India, the world’s second most populated country with an economy that is growing and developing in a rapid pace, means a lot for Swedish growth and job creation. Air India’s decision is therefore highly welcomed”, says Mikael Damberg, Swedish minister for enterprise and innovation.
The Delhi – Copenhagen route will follow from September 16, 2017 and will also be operated on a three times weekly basis. The Denmark – India market has been growing at a faster rate than the Swedish market this decade with a compound average growth rate of 14.3%.
The Danish government has been working for “several years” to secure this non-stop connection into India and minister for transport, building, and housing, Ole Birk Olesen, visited Delhi in late February together with the management of Copenhagen Airport, and in April he met with Air India in Denmark as part of a renewed effort to secure the route.
“International accessibility and efficient flight connections play an important role in relation to growth and job creation in Denmark, and this is a competitive parameter when it comes to attracting businesses. So I am very pleased that Air India has decided to open a non-stop route between Copenhagen and Delhi,” he explains.
In the last ten years, Denmark’s trade with India has trailed behind that of several other Northern European countries. Denmark’s trade with India currently has a value of just under DKK 10 billion, but the lack of connectivity means the potential is much larger now non-stop flights are available.
Direct access from a huge tourism market also holds considerable potential for creating jobs and growth in the tourism sector. At the global level, the number of outbound Indian tourists has doubled in just a few years and is predicted to continue to rise thanks to a growing middle class.
It is estimated the year-round route could grow Denmark’s annual GDP by DKK 259 million, according to a calculation model developed by Damvad Analytics, a view supported by Michael Svane, CEO, Federation of Danish Transport.
“A non-stop connection between India and Denmark has long been high on the wish list of Danish companies. India is a very attractive market for Danish businesses and a number of companies have already set up operations there. The non-stop connection will strengthen trade between Denmark and India,” he says.
Copenhagen and Stockholm are both key Star Alliance hubs and Air India will be working closely with SAS Scandinavian Airlines to deliver additional feed via the two Northern European capitals. While many may be predicting the demise of the global airline alliance – at least in its current format – this is an excellent example of how joining the dots within the alliance can deliver benefits to the membership.
READ MORE… Branded global alliances aren’t dead – yet
Although Star has the dominant alliance presence in both Scandinavia and India, it has suffered significant traffic leakage between the two nations, a sizeable O&D market of almost 420 PPDEW (passengers per day each way). Although Air India’s fellow alliance member Lufthansa is the largest single airline between India and Scandinavia with a 18.9% O&D traffic share in 2016, the largest flows of passengers were via Doha with Qatar Airways and Dubai with Emirates Airline.
In fact the alliance has seen its share of O&D traffic between Scandinavia and India fall from 50.7% in 2010 to 30.4% in 2016 with its own traffic growing just 3.8% during the period, versus the market growth of 73.2%.