India is a market in which North American carriers have traditionally struggled. For example, of US carriers, only United flies directly to India, out of their hub in Newark. Meanwhile both American and Delta have canceled their flights there over the past several years, instead focusing on one-stop codesharing opportunities between the two countries; Delta even recently strengthened their partnership with Jet Airways.
Why is India such a tough market for North American airlines?
Delta’s CEO has blamed this on the Gulf carriers, saying that they forced the US carriers to exit the market. If that were true, I don’t think United would still have flights to both Delhi and Mumbai. There’s no doubt that Gulf carriers are providing much of the lift for passengers between the US and India, but I think Richard Anderson is wrong about the cause and effect relationship there.
The reality is that India is just a very tough market. It’s a long ways from North America, and it’s a fairly low yielding market. Economy class passengers are extremely price sensitive, and a lot of travel is still booked through consolidators. While there’s some premium demand, it’s also largely low yielding, and historically hasn’t been enough to make these routes profitable.
However, there are two considerations which have seriously changed, which put India back on the map:
- Oil prices have decreased greatly, which translates into huge savings for ultra longhaul flying
- A few North American carriers now have the 787, which lowers operating costs even further, and also limits capacity
In theory this is a recipe for success — it allows carriers to improve their yields a bit since they’re not flooding the market with seats, while also keeping down operating costs.
Air Canada is thriving in India, adding frequencies and new flight
It seems this strategy has been working great for Air Canada. As of November 2015, Air Canada launched 4x weekly flights between Toronto and Delhi. As of October 30, 2016, the Toronto to Delhi flight will be daily. On top of that, Air Canada will be launching 3x weekly Boeing 787-9 flights between Vancouver to Delhi as of October 20, 2016. The flight will operate with the following schedule:
AC72 Vancouver to Delhi departing 9:40PM arriving 1:20AM (+2 days)
AC73 Delhi to Vancouver departing 6:30AM arriving 6:55AM
The flight is blocked at 14hr10min to India, and 13hr55min back to Canada.
Admittedly Air Canada and United have the benefit of partnering with Air India, which opens up lots of opportunities for connecting traffic.
Business class awards are readily available on the new flight
If you are interested in redeeming miles on this new flight, business class award availability is WIDE OPEN as of now. Most flights have at least two business class award seats, while other flights have as many as eight business class award seats, which is insane.
Keep in mind that Air Canada has a very nice reverse herringbone seat on their 787s, so it’s the best business class hard product nonstop between North America and India (it certainly beats the business class seats offered by United and Air India).
If you do want to redeem miles on this flight, here’s how much a one-way business class award will cost you:
- Air Canada Aeroplan: 75,000 miles (plus fuel surcharges)
- Avianca LifeMiles: 78,000 miles
- United MileagePlus: 80,000 miles
I’d say Avianca LifeMiles is probably the best option, given the lack of fuel surcharges and reasonable price.
Bottom line
It’s great to see Air Canada succeeding in India. A combination of low oil prices and more efficient planes like the 787 should open up plenty of new possibilities for flights to India, so I’m curious to see if American and/or Delta eventually reenter the market.
If you are looking to redeem miles to India, there’s so much business class award availability on Air Canada’s new flight, which is a great opportunity, given their excellent seat.
Would you like to see more nonstop flights between North America and India?
Well, this is interesting . What are your thoughts Ben?
http://m.timesofindia.com/business/india-business/Carriers-line-up-more-India-US-direct-flights/articleshow/52230631.cms
> While there’s some premium demand, it’s also largely low yielding, and historically hasn’t been enough to make these routes profitable.
Lucky, I think you're overlooking an important factor. Most international flights arrive in India late in the evening or in the middle of the night (true of UA/AC). Why? I have no clue. Domestic on the other hand is predominantly non-functional at night. What this means is that in order to fly to any...
> While there’s some premium demand, it’s also largely low yielding, and historically hasn’t been enough to make these routes profitable.
Lucky, I think you're overlooking an important factor. Most international flights arrive in India late in the evening or in the middle of the night (true of UA/AC). Why? I have no clue. Domestic on the other hand is predominantly non-functional at night. What this means is that in order to fly to any Indian airport other than DEL/BOM on UA/AC, I'd have to spend a night in transit after ~20 hours of flying from the west coast. Compare this with flying via the gulf where connectivity to small cities is fantastic and connection times are a couple of hours. In the end UA/AC etc. limit themselves to traffic terminating in DEL/BOM regardless of price, service, etc.
NA-India is low yield is a myth coined by EU/US JV partners(except BA) who couldn't compete with ME3 and left the market.
Other than 6 major NA cities to DEL/BOM, even Y is very expensive. British Airways is very successful in operating premium heavy B789 to secondary cities.
I am sure ME/Chinese carriers and fans are not happy with this development. AC will be successful even if they are more expensive than ME/Chinese.
Indians are cheap, Canadians are cheap...old AC better chop those fares low. Probably won't be much of a money makers.
Phoenix is right on. I lived in Toronto for 8 years and the sheer number of Indian/ Bangladesh that are settling in the GTA far outnumbers any other group. AC has a domestic market for their flights. Very simple.
@Phoenix
If I understand correctly Canadian Indians in general and Punjabis to be specific don't like Air India. So I think it is a wise choice within *A. Lot(??) of them are asylum seekers. I may be wrong, someone can correct me.
IMHO AC/AI should use BHX hub. ie., AC should operate YYZ-BHX and YVR-BHX and AI should operate BHX-DEL and BHX-ATQ. It will cover bulk of Canada-India passengers.
Makes sense. There is a huge Indian diaspora in Canada. I fly AC frequently from YYZ to DEL for work and I've never seen the business class empty and by the number of passengers at the gate, I am willing to guess the flights are filled by at least 90% capacity.
@PhatMiles and @Chuck,
How are there 3 segments involved if you are not flying to Delhi/Mumbai? YYZ - DEL is one segment and then DEL to other city is the second segment. Gulf Airlines do have a lot of flights to a lot of Indian cities but definitely not more than Indian domestic flights.
For example if you want to fly to the city of Udaipur (with the world's best hotel!) it will be 3...
@PhatMiles and @Chuck,
How are there 3 segments involved if you are not flying to Delhi/Mumbai? YYZ - DEL is one segment and then DEL to other city is the second segment. Gulf Airlines do have a lot of flights to a lot of Indian cities but definitely not more than Indian domestic flights.
For example if you want to fly to the city of Udaipur (with the world's best hotel!) it will be 3 segments on both North American airlines as well as Gulf carriers.
I can't comment about the hard product though, I haven't tried any North American carrier except SouthWest!
Currently fares on Air Canada are about $2800usd. So I think if you redeem about 150-160k miles roundtrip (80k+80k) thats only about a 1.6cpm redemption. Personally I usually try to aim for a 2cpm redemption or better.
A bit off topic, but could use your travel wise advice. Why does Air Canada book 2 one ways instead of 1 round trip? What determines when a flight goes up in price (supply & demand or something else)? Is there an ideal sweet spot for buying tickets, e.g. 30 days in advance, 60 days, etc?
Vancouverite here.
The number of Indian immigrants in my city (and the city of Surrey) will singlehandedly print money for AC. And it will be all O&D/VFR traffic on this route.
The other commenters above are correct re: the ME3 in Canada - as long as the Canadian government gets into bed with AC every night, that is not going to change.
The only thing I wonder about is why AI and 9W haven't jumped...
Vancouverite here.
The number of Indian immigrants in my city (and the city of Surrey) will singlehandedly print money for AC. And it will be all O&D/VFR traffic on this route.
The other commenters above are correct re: the ME3 in Canada - as long as the Canadian government gets into bed with AC every night, that is not going to change.
The only thing I wonder about is why AI and 9W haven't jumped on this so far? Lingering effects from AI182? Simple mismanagement and incompetence?
I was considering Air Canada from ORD-DEL via YYZ. But it turns out that in spite of having a valid US visa, I needed a transit visa. This killed the deal as getting a visa was a huge hassle.
Managed to get a booking in Business in the last week of May using Aeroplan on the Dubai to Toronto route on the way back home..looking forward to checking out the AC product/service.
Cancelled an earlier booking YYZ-DEL on AC as the connection times were bad for onwards to Goa(GOI) on AirIndia as its in the Star Alliance - it worked better to go on Emirates and then connect onwards.
Delhi isn't all of India. Used to be India had 4 major cities (Delhi/Mumbai/Kolkata/Chennai) but now there are many more, with their own international airports.
If I'm not going from Vancouver/Toronto/Newark and I am not going to Delhi/Mumbai, then my trip requires 3 segments, whereas the gulfies will do it in 2 segments. Huge difference both in time and in effort. They can afford to cover much of India because Gulf-India is just like...
Delhi isn't all of India. Used to be India had 4 major cities (Delhi/Mumbai/Kolkata/Chennai) but now there are many more, with their own international airports.
If I'm not going from Vancouver/Toronto/Newark and I am not going to Delhi/Mumbai, then my trip requires 3 segments, whereas the gulfies will do it in 2 segments. Huge difference both in time and in effort. They can afford to cover much of India because Gulf-India is just like a US domestic flight, they can cover it with narrowbodies.
Of course they could turn DEL into an efficient short-connection hub, jcompeting with the gulf airports. But for that to work, it's necessary to connect DEL nonstop to many North American airports. The gulf airlines do that from their hubs.
These flights aren't really times for connections except for maybe to/from BOM where there are some flights that late. UA for the most part does not rely on AI due to their TATL partnership with LH. UA puts people on 9W for connections rather than AI as much as possible.
Or maybe Air Canada is succeeding in India because the Canadian government has been extremely aggressive in restricting access of the ME3 to Canada (EK and EY each get 3 flights a week to YYZ and that's all they're allowed to fly in the entire country) to protect AC from competition?
@Endre Anderson is still CEO until May 2nd
"Restrictive transit visa policies (even if you are just connecting and not exiting the airport) in europe"
For many countries, as long as you have a valid US visa in your passport, you can transit through many European countries to and from the US.
You have to remember that the Canadian Government is protectionist in its bilaterals with the UAE and other ME countries. Thus Emirates only flies 3x per week to one Canadian city. Had they and Etihad and Qatar been sending 77Ws into YVR and other cities, I wonder if these routes would've been started.
US airlines do need to compete with multiple ME3 flights to multiple US cities. Although the constant whining of the US3...
You have to remember that the Canadian Government is protectionist in its bilaterals with the UAE and other ME countries. Thus Emirates only flies 3x per week to one Canadian city. Had they and Etihad and Qatar been sending 77Ws into YVR and other cities, I wonder if these routes would've been started.
US airlines do need to compete with multiple ME3 flights to multiple US cities. Although the constant whining of the US3 does get irritating and they do have their problems.
UA (originally Continental) is still in the nonstop market probably because there is a very big Indian population in the New York area. You also have Air India competing on EWR-BOM and indirectly with JFK-DEL.
"Richard Anderson is wrong " Richard Anderson was wrong - I beleive he isn;t CEO of Delta any more. He had retired
Air Canada is successful because it has code shares with Air India. UA has limited success in India because it is dependent on TATL JV to serve Indian market and its EU JV partner LH at best stagnant or on decline.
DL/AF/KL with 9W will not go anywhere unless Indian secondary cities are connected to AMS.
One more avenue DL appears to be pursuing India is LCC Virgin out of LGW.
If AC and AI ever form a JV, UA and LH are done.
Restrictive transit visa policies (even if you are just connecting and not exiting the airport) in europe are equally responsible. United alone is able to operate to bom and del due to non stop flights. Too bad american could not keep up with their ord-del route.
While India is a low yielding market that makes it tough, I feel terrible to travel on North American airlines for such a long haul flight. Considering the fact that there are far fewer airports in India, when you factor in the additional journey from the Hub to Home - I would never attempt to sit on UA Economy. Same with Air India too. That is why ME3 is taking the biggest share in that...
While India is a low yielding market that makes it tough, I feel terrible to travel on North American airlines for such a long haul flight. Considering the fact that there are far fewer airports in India, when you factor in the additional journey from the Hub to Home - I would never attempt to sit on UA Economy. Same with Air India too. That is why ME3 is taking the biggest share in that market. Their Econ product is good and their connectivity from AUH/DXB/DOH is phenomenal to all parts of India.