Sir Tim Clark
“I think what’s interesting about the Indian market is that it is one of the major countries that continues to grow, notwithstanding the decline in the value of its currency. It nevertheless is a hugely fertile domestic market. As it internationalises and liberalises its trade policies, it will become far more attractive for people to go in and out of India.
The problem is that they have, to an extent, pre-determinist thinking with regard to access. This attitude is mainly towards those carriers that operate within a 3,000 mile radius – which by the way takes care of an awful lot of city pair demand in and out of India.
If you look at the Middle East, if you look at the Far East, within that area, there are a tremendous amount of Indians travelling. A bit like the Chinese market, the Indians in the middle-class segments, have become far more aspirational and can afford to travel overseas. The restriction that is imposed upon the foreign carrier community, which only inhibits that, is actually quite startling.
So once the Indian elections are over, and we’re hoping that whoever gets in, there comes to the realisation that it’s probably a good idea to free up access. After all, in Dubai we are running at about 95% (seat factors on Indian routes). It’s not just us, whether it be IndiGo, Air India, Air India Express, they’re all at very high seat factors, which suggests a high level of spill. That spill is tough to lose. Why would you do that?
I probably find that in other points in the Middle East, whether it be Bahrain, Kuwait, Saudi Arabia or Oman, they are all facing the same kind of spillage. It makes a lot of sense to re-examine that policy and say, we are allowing more access, it isn’t causing any damage and has not caused any damage to Indian carriers. On the contrary, they’ve benefited to the extent that you can see the high seat factors. So I’m hoping that within the next month or two we might see some movement.
The Indian government believes that the policies that they have, protect the Indian carriers. However I struggle with that because we know that Air India has struggled with profitability ever since it was conceived, apart from when it first started, during the era that the Tata family owned it.
In fact, I remember flying on my first 707 in January 1960. It was an Air India 707, I remember it to this day. It was a great airline which was recognised internationally. However, I’m not quite sure whether the government believed that the profitability of Air India would be compromised if there was more access. That can’t be right.
Certainly, in the Dubai market, Air India and Air India Express have done very well. They have very high seat factors and every time we’ve increased the number of seats from the Dubai market to India, Air India has benefited, measurably so. I’m not quite sure who would be the beneficiary or who is benefiting by constraining the skies.
All I do know is that there is an awful lot of demand in and out of India, which is constrained and, in many respects, doesn’t move because the access isn’t there. That makes no sense.”