November 1, 2016 Indian Newslink Digital Edition

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NOVEMBER 1, 2016
Nothing should stop direct flights now
Sourced Content
Asia New Zealand Foundation
Is distance a barrier
to links between
India and New
Zealand? India has
always been more than
a single non-stop flight
away, unlike destinations
within ASEAN and North
Asia. Now, however,
the technology exists to
make non-stop flights to
and from India possible.
Both Air India and Air
New Zealand have Boeing
787 aircraft in their fleets
that could manage the 16-
hour flight time, but they
look unlikely to chance
their arms on this in the
immediate future.
Air New Zealand
regards the yield on the
sector as insufficient to
justify non-stop
flights, which require a
very heavy fuel load and
thus a potentially smaller
payload. Moreover,
while New Delhi is the
largest single traffic point,
accounting for nearly
half, the balance is spread
across a number of other
cities.
Codeshare Options
Of these, Mumbai would
be the most significant
for outbound traffic from
India. Mumbai is the
only centre that Air New
Zealand is entitled to
serve, but as we discuss
below it has some useful
code-share options.
Air India, which is now
a Star Alliance member,
crucially has the right to
fly directly to Auckland
from New Delhi as well as
from any other Indian city
it wishes.
The nearest it has
come so far, though, is
Australia. It currently flies
from New Delhi to Sydney
and Melbourne using a
Boeing 787, which has the
capability to service New
Zealand non-stop as well.
Open Skies Agreement
If direct flights still look
problematic, the good
news is that Air New
Zealand is now
better placed to
promote the Indian
market with Singapore
Airlines.
India long ago came
to a generous open-skies
arrangement with ASEAN,
and one of the many
positive results is that
Singapore Airlines and its
SilkAir affiliate currently
service a dozen Indian
cities.
Of these, Mumbai,
Kolkata, Chennai,
Bangalore, Kochi and
Hyderabad are specified
as third-country codeshare
destinations in the
new ASA.
Thus. Air New Zealand
can offer competitively
priced tickets to these six
cities under its “common
metal” revenue-sharing
arrangement with
Singapore Airlines.
In the case of New Delhi
itself, Air New Zealand
can code-share with Air
India but not with a thirdcountry
carrier.
Singapore Airlines
is, of course, free to
market New Delhi as a
destination. That leaves
Air India, which once
flew to Fiji but has never
mounted services to New
Zealand.
Using Intermediate
Points
With the growing
diaspora in New Zealand
making its mark, it may
eventually be able to
contemplate direct flights
to Auckland, or adding a
Tasman leg to its service
to Australia. Both Air New
Zealand and Air India
may use intermediate
points in Australia,
Bangkok, Hong Kong or
Singapore.
Having its own service
to New Zealand might,
in turn, strengthen Air
India’s hand in marketing
India as a stopover
destination en route
to Europe, something
Air New Zealand and
Singapore Airlines, which
lack beyond rights from
India, are less well placed
to do.
Do direct flights
matter to the growth of
the relationship? The
short answer has
to be yes, but the
verdict may be more
nuanced over such long
distances
A 2013 study of air
services liberalisation in
New Zealand by Aaron
Schiff and John Small
(‘Economic effects of Air
Services Liberalisation
in New Zealand- Covec
Limited)
suggests the main
benefit has been to
allow competing hub
arrangements.
In addition to
Singapore, the Malaysian,
Thai and Hong Kong
carriers (not to mention
Emirates and Qantas) can
offer good connections to
India from New Zealand.
Price-Sensitive Market
India is reputedly a
price-sensitive market,
meaning hub carriers can
try to offset
time increases with
cheaper fares. The
evidence from China,
however, suggests that
education services in
Australasia have done
best between cities
serviced by direct flights.
Similarly, the vastly
greater tourist growth
projections for China
underline the difference
between markets that
enjoy direct air links
and those that do not.
Arguably direct air
services need to become
part of the equation
between India and New
Zealand in the next three
or four years.
With Air New Zealand
currently excluded from
flying to New Delhi (the
most logical connection
point), making both
national carriers eligible
to fly there direct by 2020
could be just the boost the
relationship will need by
then.
India’s June 2016
announcement that it will
open its skies for direct
services between
destinations over 5000
kms from India may be a
helpful pointer.
Editor’s Note: The
above is an extract
from ‘India and New
Zealand: Growing our
Connectivity,’ a 38-
page report published
(PDF format) by the
Wellington based
Asia New Zealand
Foundation’ on October
15, 2016, the day on
which the Foundationsponsored
‘Auckland
Diwali 2016’ was held at
Aotea Square, Auckland.
The Report examines
several areas of
existing and emerging
cooperation between
New Zealand and India.
Written by Graeme
Waters, a former High
Commissioner to India
and a diplomat with
extensive experience,
parts of the Report
will appear in Indian
Newslink in several
ensuing issues.