Air India And Singapore Airlines' Codeshare Expansion Shows The Second Hub Ambitions Of SIA

(MENAFN- Live Mint) This morning, Air India and Singapore airlines issued a joint press release about expanding their codeshare agreement, the first such development since 2010. Singapore Airlines, which will have a 25.1% stake in combined Air India, and will have Air India Express as its wholly owned subsidiary.

The expansion will see the addition of 11 Indian cities and 40 international destinations to their network, and the effective winter schedule will begin on October 27. Additionally, the two airlines will also codeshare on each other's flights between Singapore to Bengaluru and Chennai, increasing their total weekly scheduled codeshare services between the two countries to 56 from 14. In both these sectors, the operators are Air India group, Singapore Airlines group and IndiGo -- making the competition tough for the Indian market leader.

SIA will codeshare on Air India's domestic flights between Delhi and Amritsar, Bengaluru, Coimbatore, Lucknow, and Varanasi; between Mumbai and Ahmedabad, Amritsar, Bengaluru, Coimbatore, Goa, Jaipur, Kolkata, Lucknow, and Thiruvananthapuram, and between Kolkata and Guwahati.

Air India customers can access 29 destinations across SIA's network. These are Adelaide, Brisbane, Cairns, Darwin, Melbourne, Perth, and Sydney (Australia), Bandar Seri Begawan (Brunei), Phnom Penh and Siem Reap (Cambodia), Denpasar, Jakarta, Medan, and Surabaya (Indonesia), Fukuoka, Nagoya, Osaka, Tokyo-Haneda, and Tokyo-Narita (Japan), Busan and Seoul (South Korea), Kuala Lumpur and Penang (Malaysia), Auckland (New Zealand), Cebu and Manila (the Philippines), as well as Danang, Hanoi, and Ho Chi Minh City (Vietnam). This includes existing codeshare arrangements to Kuala Lumpur.

Singapore Airlines customers will be able to connect to Air India's international services from its three hubs, Delhi, Mumbai and Bengaluru, to 11 destinations, which include Copenhagen, Paris, Frankfurt, Milan, Nairobi, Amsterdam, Jeddah, Riyadh, Colombo, Birmingham and London. Singapore Airlines already operates to all destinations except Nairobi, Jeddah, Riyadh and Birmingham.

This indicates Singapore Airlines' confidence in Air India and its plans to route passengers via Air India, despite its current negative publicity around equipment due to a lack of upgrades in its hard product.
While Air India's operations to London from Delhi are already seeing the new product with the deployment of the A350s, the other destinations to Europe likely indicate sectors that would see the deployment of refurbished aircraft in future.
Such cooperation in the early days could pave the way for a metal-neutral pact in future, at least on the metro routes between Air India and Singapore Airlines. A metal-neutral pact is an agreement between airlines to share revenue regardless of which airline's aircraft is used on a flight.

As and when the flights are available for sale, it will indicate the pricing and if Singapore Airlines passengers are getting a discount for flights via Delhi on a product currently not at par with Singapore Airlines' product.

This also is a big leap for Delhi Airport, which has been focusing on becoming a hub. Having international operations at the same terminal will facilitate faster transfers, but a longer connection time based on the current schedules-- for which the codeshare is planned -- shows that the airport has the potential to grow its non-aero revenue on the back of captive transfer passengers. This may also possibly need to expand into a larger food and retail offering with global brands unlike the current ones.

Singapore is a city-state, and for Singapore Airlines to grow, it has to think differently, especially with low-cost competition from neighbouring Malaysia and cost competition from Thailand and Indonesia. India is a large enough market for Singapore Airlines to lay its hands on, and it has often indicated that it aims to have a multi-hub strategy in future. A multi-hub may or may not mean having two bases for own aircraft, but a strong partnership with equity investment as with Air India.

According to data shared by Cirium, an aviation analytics company, exclusively for this article, there are 310 weekly flights between India and Singapore each way this November. Airlines will offer 69,891 seats each way. Singapore Airlines is the largest carrier, with 32% of all frequencies and 40% of all seats. Coupled with its low-cost subsidiary Scoot, the Singapore Airlines group has 45% of all frequencies and 54% of all seats in the sector. If one adds Air India and Air India Express to the mix, this becomes 74% of all frequencies and 78% of all seats on offer. Rival IndiGo has 25% of all frequencies and 22% of all available seats.

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