Airlines adding routes and expanding fleets could signal a new baseline in Indian outbound travel

A month ago, Singapore Airlines' low-cost carrier, Scoot, resumed daily Chennai-Singapore flights. The route first featured on the carrier's 2016 India debut before it was suspended amid falling demand during COVID-19. With six Indian destinations, including Chennai and Amritsar, now locked and loaded, Scoot has hinted at its expanding its presence in India, especially in tier-2 towns.

"We're still evaluating different destinations, and I've been visiting markets," said Brian Torrey, General Manager (India and West Asia) at Scoot, "When you pioneer second-tier cities, you have to unlock them in the right order. You don't want to go too early to a market that's not ready." He added: "There's a new baseline for travel (in India), and to have a key metro like Chennai in our market — we're very excited."

Scoot isn't the only airline adding new routes and shoring up its fleet. Across the world, it's the same story. At the Dubai Air Show last month, Emirates closed a 52-billion-dollar deal with Boeing as it announced the purchase of 90 Boeing-777 aircraft.

In June, Air India announced that its 70-billion-dollar shopping bag would have 34 Airbus A-350-1000s, 20 Boeing 787 Dreamliners and 140 Airbus A-320 Neos, as part of its much-hyped 470 aircraft deal with both aircraft manufacturers. Indigo has announced its own purchase of 500 Airbus A-320s, as part of a 55-billion-dollar deal.

However, experts point out that there's a clear distinction between the Emirates order, and those by Indian carriers. "India's growth is a reality, and that is why Air India, Akasa and Indigo are all growing," said VK Mathews, Chairman at IBS Software Services, "But if you look at Emirates, the capacity increase that they bring is very less because a considerable part of it is replacement."

A case in point is Indigo not only adding aircraft, but also destinations to its route map — 20 in the last six months — including Almaty, Nairobi, Baku and Tbilisi. Hyderabad, Ahmedabad and Goa, on the other hand, feature on the carrier's latest list of international connections.

Several of of these decisions have been made thanks to a healthy spike in outbound travel. A ministry of tourism report estimates an outbound travel growth of 37.9% year-on-year for January-July 2023, and this comes despite an overall hike in the cost of travel on account of a 45% hike in aviation turbine fuel or ATF.

Today, given that destinations like Sri Lanka, Thailand and Vietnam are easing visa regulations for Indians, there's every indication that the spike in outbound travel from India, will only keep hitting new highs. Online travel agencies are reporting a spike not only in overall ticket-price per booking, but also in the number of travelers making these bookings.

"We're seeing healthy growth in what we call converts or our number of orders," said Hari Ganapathy, Co-Founder of PickYourTrail, "This number is growing muchfaster than the market — we are growing at least 30 to 35 percent year-on-year, on that number."

With aircraft, routes, destinations and simply the number of people traveling from India on the rise, there's little doubt that a new baseline for outbound travel could well be in the making.