Air India pulls out of Delhi Moscow market

Air India has stopped accepting bookings for its flights between New Delhi and Moscow effective 15th July 2017. The flight between the capitals of two countries was launched in July 2014, after 15 long years and operated daily at its peak and was scheduled to be four times a week. The flight was reduced to twice a week in July 2015 and since then seen change in equipment to A320 family along frequent changes in frequency.

The route was one of the initial B787 led expansion for the National carrier and Star Alliance member but the growing business, defence ties and tourism which was expected to work in favour of Air India was hampered by lower oil prices impacting the Russian economy and fall in rouble value affecting inbound tourism in India. What would have been a great plan during a planning stage seems to have quickly turned into a nightmare since the planning would have been at times which preceded the Russia Ukraine conflict while the operations started post it. Since then the Russian economy has faced sanctions and the country has had disputed with European Union and Turkey amongst others.

Air India started with a late night departure from Delhi and early morning arrival at Moscow Domodedovo, one of the many airports in Moscow. Russian National Carrier is based at Sheremetyevo and is a Skyteam member. The largest Russian airline at Domodedovo – S7 Airlines is an Oneworld member. The early morning arrival and quick turnaround reduced the possibility of codeshare agreement with quick two-way connections.

In February 2015, the route saw an addition of Transaero, a private Russian carrier which operated flights between Moscow Vnukovo – the third airport of Moscow  and New Delhi. These flights were operated by B767 aircraft twice a week.

Aeroflot increased frequency to Delhi from a single daily A330 service to double daily B737 service in February 2016 and further moving to double daily A330 service later. This increase in capacity and a daily product would have certainly dented the changes of Air India.

Air India started international connector between Delhi and Goa – the most popular destination for Russians to seamlessly offer Moscow – Goa connectivity. This implied that passengers to Moscow could clear immigration at Goa and vice versa. The airline also changed its timings to operate a late evening departure from Delhi and mid-night arrival in Moscow. While this opened up the possibility of Australia – Russia connections via Delhi, the pure Origin – Destination traffic would have suffered owing to the arrival timings in Moscow.

Airlines cancel routes for multiple reasons. The prime ones are commercial and political. While in case of Moscow the later is ruled out, commercial reasons can range from losses – the most frequent to lack of feed and better deployment of aircraft for higher and profitable network feed.

RUB to USD

RUB to USD. Source: www.xe.com

RUB to INR

RUB to INR. Source: www.xe.com

An airline can get a fair share of the market by deploying capacity. This capacity deployment, off course, has to be profitable. The two weekly frequencies were not only taking away aircraft for only two days but would have also created additional crew costs in Moscow due to layovers. Airlines get better deals from airport operators, hotels and ground handling agencies when they have higher frequencies, preferably daily. A daily or higher frequency also suits in uplifting more cargo, which forms the backbone of many international flights.

 International Crude Oil price per barrel Russian economy is dependent on Oil & Gas

International Crude Oil price per barrel
Russian economy is dependent on Oil & Gas

While the airline will be delighted with the oil prices at the moment, some routes like this one are the victim of these very lower oil prices. Hopefully the airline will be third time lucky and launch flights to Moscow again.

Air India could never get a sizeable market.  Data Source: DGCA

Air India could never get a sizeable market.
Data Source: DGCA

I wonder if the airline would have run the route successfully had it operated the Moscow flight along with its afternoon European Departure bank?

Would a 1400 departure from Delhi with 1730 arrival in Moscow and 2100 departure from Moscow with a 0530 arrival in Delhi the next day work better? Probably even these timings would require support from a local Russian carrier for connections to some major cities with Indian population like St. Petersburg and Kazan.

Now that the aircraft is free, will it be used to increase capacity to one or both of the Australian routes? Probably, Yes!

Major milestones since Air India started flights

Major milestones since Air India started flights

1184 Total Views 1 Views Today

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>