When fly dubai started operations to Lucknow in June, many were surprised. Why would Dubai's first low cost carrier (LCC) choose a Tier II city for its maiden Indian route? Would a metro not have been the obvious choice? But this is good business strategy, something that other foreign carriers have done as well.
Air Asia, from Kuala Lumpur and Air Arabia, from Sharjah, fly to various Tier II cities — Trichy, Coimbatore, Kozhikode, Kochi, Lucknow, Nagpur, Jaipur and Ahmedabad.
Aviation experts say that Tier II cities have huge potential because they are populous and their residents have increasingly disposable incomes and the desire to travel. Kapil Kaul of the Centre for Asia Pacific Aviation consultancy, says low cost carriers "stimulate this latent demand. Plus, airport infrastructure at some of these places has improved. Now, there is no congestion and it's possible for the aircraft to make quick turnarounds here. I expect another 10-12 cities to be targeted".
Air Asia agrees it was good business thinking on their part to choose Trichy as their first Indian route and follow this up with eight other Tier II cities. Its CEO Tony Fernandes says the Indian market is second only to China. The thinking is obvious.
Cheap foreign carriers choose Indian cities that have particular needs or particular meaning to the wider world. Air Asia chose Trichy because it is a popular pilgrimage site. Lucknow was attractive to flydubai because it is one of India's fastest growing cities, with a presence in the manufacturing, commerce, retail and education sectors.
Unfortunately, while the Indian skies have opened for foreign carriers, the reverse has not happened. The government does not allow domestic airlines to fly abroad till they complete five years of domestic operations.
Kaul says it adds up to "discrimination against Indian carriers.We need to seriously evaluate this policy. Sixty per cent of the world's population is five hours from India. This is a massive catchment area."
It is creditable that foreign low cost carriers recognized this. Air Arabia for instance, flies to Alexandria, Assiut and Luxor.
"In India, we operate to Nagpur, Jaipur, Ahmedabad, Cochin, Coimbatore and Thiruvanathapuram. Southern cities have many expatriates in West Asia," says Adel Ali, its group CEO.
These foreign airlines offer great bargains. It's time India caught up. Or got left behind.
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