The war in Ukraine keeps Air India at the top of non-stop routes to the US

The Tata group took control of Air India in the last days of January 2022. Within days, Russia attacked Ukraine, and the war in Europe has now lasted more than two years. One of the many consequences of this war was that American airlines did not use the airspace over Russia, because Western countries banned the use of airspace by Russian airlines. This was also in the middle of the pandemic and flights were not yet fully operational around the world.

In the following quarters, several companies from the Tata group spoke about the challenges of the Ukrainian war on their financial position. From Tata Steel to Tata Motors, the impact of commodity prices, sourcing, semiconductor costs and navigating the maze of sanctions was a challenge for all, except one entity that clearly benefited and was most unlike any other : the airline.

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According to data shared exclusively for this article by Cirium, an aviation analytics company, there has been an increase of just four frequencies between India and the United States in May 2024, compared to February 2020, the last month of operations before the COVID-19 outbreak. -induced shutdown. However, a detailed examination of the data shows that US airlines have reduced frequencies by 21 weekly flights, while Air India has added new flights. This remains one of the few routes where Air India’s strength will remain unmatched for years to come.

Before the corona crisis, Air India operated 33 non-stop flights per week to the US. It launched some new routes as part of the air bubble arrangement, but these were limited in time. On the other side of COVID, Air India now operates 51 weekly nonstops to the United States.

Air India Advantage

Air India flies to New York, Newark, Washington, Chicago and San Francisco in the United States. It operates 34 weekly non-stops from Delhi, 14 from Mumbai and three from Bengaluru. In the United States, it operates 18 weekly departures from San Francisco, 14 from JFK, New York; seven each from Newark and Chicago and five from Washington.

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The non-stop competition from the American side is that American Airlines flies from New York to Delhi and United from Newark to Delhi. The airline offers as many as 15,476 weekly seats between India and the United States, which is 80 percent of all non-stop seats offered.

The passenger mix on the route includes business travelers, government traffic and a large segment classified as VFR (Visiting Friends and Relatives). The VFR traffic often consists of seniors visiting their children and a non-stop removes the hassle of transfers at intermediate airports, giving Air India the edge.

Who withdrew?

United was the only airline to challenge Air India on the nonstops, while Delta and American Airlines had joined just before COVID as traffic between the two countries grew rapidly. United has withdrawn from the Newark to Mumbai and San Francisco to Delhi routes, both of which have now become Air India monopolies, with San Francisco being a stronghold for the airline. Interestingly, Air India has launched the last flights to San Francisco from all its routes to the US, but today it has reached maximum capacity from San Francisco.

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Tail nut

It remains unclear when the war in Europe will end and on what terms. Will the world quickly reconcile with the new reality and work to restore pre-war airspace use? If and when that happens, United will permanently restore its pre-war network, with even Delta and American Airlines entering the market. However, Air India currently has an unassailable lead in the market. It had a 50 percent share of departures before COVID, which is now 80 percent in a much wider spread than before.

The next step for Air India is definitely the premiumization of the product, which it is doing with the use of former Delta aircraft on these routes. These planes feature Premium Economy Class, which sells at 1.8 times economy class fares for future dates and even double economy class fares closer to departure.

By the time things stabilize on the geopolitical front and US airlines are able to add flights, Air India has to hope the product is good. A not-so-current product can help in times of restrictions like now, but in a free market the product becomes king, along with pricing, loyalty and other factors.

Air India’s older B777s are in need of renovation. Will it go ahead as planned and help Air India deploy the refurbished planes in the United States? Will the A350s help launch new routes to the United States and spread the airline within the US? Be that as it may, the war gave the airline room to face the competition, and it made the most of it.