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Monday, February 29, 2016

Madrid & Manila: The missing links in Delhi Airport's network


If one looks at Delhi Airport's current international network of European and Asian destinations, it is connected to 13 European cities and 17 Asia Pacific (east of Delhi) cities with direct flights. Direct flights are available from Delhi to all top 10 busiest airports in Asia* except Jakarta and to all top 10 busiest airports in Europe* except Madrid and Barcelona. In 2015, Madrid was ranked at number 6 in the list of busiest airports in Europe by passenger traffic while Barcelona came at number 10; The Adolf Suarez Madrid-Barajas Airport had handled 46.82 million passengers in 2015 and is also ahead of Delhi Airport in the global ranking as Delhi had handled 45.98 million passengers in the same period. While Barcelona El-Prat Airport had handled 39.71 million passengers in 2015; With currently no flight operating between India and Spain, Madrid emerges as a major missing link in Delhi Airport's European network. Jakarta Soekarno-Hatta International Airport, the fifth busiest airport in Asia, is expected to get connected with Delhi in 2016 with Indonesian Govt taking initiatives. And  the flag-carrier Garuda Indonesia is the most likely airline to operate on the Jakarta-Delhi route. Though not featured in the list of top 10 Asian airports, Manila is one of the major destinations in Southeast Asia which lacks direct air-connectivity from Delhi, Manila-Ninoy Aquino International Airport had handled 36.68 million passengers in 2015.
India has 3 full-service carriers with long-haul aspirations while Air India and Jet Airways do operate flights to Europe and Asia, the newcomer Vistara is currently barred from flying on international routes as it does not satisfy the so called '5/20' rule yet. Although it is widely anticipated that Govt of India will soon allow new airlines to fly abroad, an area Vistara is keen to expand with its long term goal of becoming a hub carrier. Here we will look at the prospect of any of the 3 airlines launching Delhi-Madrid and Delhi-Manila flights in the coming years.

Madrid
According to the CAPA-Centre for Aviation & OAG Traffic Analyser’s report around 45,000 tickets were booked from Spain to Delhi in 2015 which resulted into daily around 123 origin and destination (O&D) passengers (one way) on the 7,262 km Delhi-Madrid route. And it is often observed that O&D passenger traffic typically increases by up to 20% after the launch of a direct flight on that route. Therefore it can reach up to daily 150 passengers (one way) on Delhi-Madrid route but still that won't be sufficient to sustain daily flight using wide-body aircraft on the route. This issue can be addressed by either reducing frequency to 3 or 4 weekly or feeling up the flight with traffic feeds from the airline's Asian network. We will discuss the possibilities of transfer traffic between Spain and Asia via Delhi. 


If we look at Madrid Airport's international network, the Asian market is neglected with not enough direct flights except 2 present destinations: Beijing (Air China) and Hangzhou (Hainan Airlines) and 3 new prospective destinations: Tokyo and Shanghai (Iberia) and Hong Kong (Cathay Pacific) in 2016. Therefor a Delhi based carrier can easily exploit Madrid Airport's poor Asian connectivity by launching direct flight to Madrid and providing it with convenient connections to its Asian network. Delhi's geographic location is also favored given it is almost at the middle of Madrid and Southeast/East Asian destinations. Here is a list of annual O&D passengers from Madrid to several destinations currently not served with direct flight.


Manila
PAL service launch cake at Delhi Airport in 2011
The Delhi-Manila-Delhi sector has already saw unsuccessful attempt by airline to operate non-stop flights in the past. In late March 2011, Philippine Airlines (PAL) had launched 3 weekly non-stop service on Manila-Delhi route and 3 weekly one-stop service on Manila-Delhi route via Bangkok at the same time, with fifth freedom traffic rights on Bangkok-Delhi route. The airline had deployed its 302 seater Airbus A330-300 on both the services. But the non-stop flight was ceased by the end of summer schedule in the same year due to poor loads (~50% on an average) on the route while the one-stop service via Bangkok was also withdrawn in 2013 after evaluating the financial performance of the sector.

According to the CAPA-Centre for Aviation & OAG Traffic Analyser’s report around 27,000 passengers (one way) traveled between Manila and Delhi via intermediate hubs in 2015 or 74 O&D passengers daily on an average on the 4,775 km route. The tally reaches around 90 daily passengers (one way) if we consider the estimated 20% jump in O&D passenger traffic with launch of direct flight. With this level of demand there is a prospect for daily narrow-body flight on the route, possibly with Airbus A319 (Air India: 122 seater A319) or Boeing 737-700 (Jet Airways: 134 seater B737-700) which can provide relatively longer range with less seat-capacity resulting moderate to good loads. 

If we look at Manila Airport's international network, the European market is neglected with not enough direct flights except 3 destinations: Amsterdam (KLM), Istanbul (Turkish Airlines) and London (PAL). There is ample scope for a Delhi based airline to bridge that gap with Delhi seating at a favorable geographic location right at the middle of Manila and most European destinations. Here is a list of annual O&D passengers from Manila to several destinations currently not served with direct flight.



Transit passengers between Europe and Asia
As it is pointed out earlier that Delhi-Madrid and Delhi-Manila O&D passengers alone will not be sufficient to sustain daily service on those sectors, therefore it will be necessary for both the flight to have traffic feed at the intermediate hub airport. According to the CAPA-Centre for Aviation & OAG Traffic Analyser’s projection, Seoul, Bangkok, Tokyo, Shanghai, Delhi and Manila are the major O&D markets from Spain (see chart-1) and Milan, Paris, Rome, Madrid, Frankfurt and Delhi are the major O&D markets from Philippine's capital Manila (see chart-2). Currently all these routes are un-served by any direct flight except Seoul where Korean Air already serves the route with only 3 weekly Boeing 777 service against a massive O&D demand on the route.

In case of Delhi-Madrid flight, it can potentially attract massive traffic feed from Manila and Bangkok at Delhi and also from Mumbai (22,000 annual one way pax to Madrid), Singapore (21,000) and Colombo (10,000) on a smaller scale. But in order to have both way convenient transit option in Delhi with limited layover time, either Madrid or Manila route from Delhi needs double daily service coinciding with departure and arrival of the other. And the most likely option is Delhi-Manila route be served with double daily narrow-body flights or 2 wide-body flights on Delhi-Manila-Mumbai and Mumbai-Manila-Delhi routes like Air India does with its Bangkok service. Here we will look at the advantage of prospective Manila-Madrid and Bangkok-Madrid flights via Delhi over the flights via Middle Eastern hub available at present.

Manila-Madrid via Delhi
Manila-Madrid
Currently no airline operates direct flight on the Manila-Madrid route. In the indirect route, Qatar Airways is the most dominating airline on the Manila-Madrid sector with both way convenient transit options involving layover time of 2 to 3 hours.


Manila-Madrid via Delhi 
City-pair
Non-stop
Via Doha
Via Delhi
Manila-Madrid
11,665 km
6,299 nm

12,629 km
6,819 nm
12,041 km
6,508 nm

If we compare the current Manila-Madrid flight via Middle Eastern hubs like Doha with prospective flight via Delhi, the via Delhi flight path is around 588 (311 nm) km shorter than the via Doha flight path, the difference is quite significant. Therefore the Manila-Delhi-Madrid flight is ideally a better proposition to both fliers and the operator as it takes less time (depends upon layover time also) and consumes less fuel as well which comprises a sizable part of the total cost of Indian airlines.

Bangkok-Madrid via Dubai
Bangkok-Madrid
Thai Airways used to serve Bangkok-Madrid route with 4 weekly Boeing 777-300ER flight but it ceased the service in September 2015. Currently Emirates and Qatar Airways are the dominating players on the Bangkok-Madrid sector with both way convenient transit options involving layover time of 1 to 2 hours.


Bangkok-Madrid via Delhi
City-pair
Non-stop
Via Dubai
Via Delhi
Bangkok-Madrid
10,205 km
5,510 nm
10,564 km
5,704 nm
10,215 km
5,515 nm

If we compare the current Bangkok-Madrid flight via Middle Eastern hubs like Dubai with prospective flight via Delhi, the via Delhi flight path is around 350 km (189 nm) shorter than the via Dubai flight path. Therefore the Bangkok-Delhi-Madrid flight is ideally a better proposition to both fliers and the operator as it takes less time (depends upon layover time also) and consumes less fuel as well which comprises a sizable part of the total cost of Indian airlines.

Possible partnership with Iberia
Spanish national carrier, Iberia is part of the British Airways led International Airlines Group (IAG) and a member of the Oneworld airlines alliance. Currently the carrier’s long-haul network is heavily focused on the Americas with 25 out of total 26 long-haul routes to the Americas. Iberia currently serves 12 destinations in South America (Bogota, Buenos Aires, Lima, Rio de Janeiro, Santiago de Chile and São Paulo), 5 each in Central America and United States and 3 in the Caribbean. And it is planning to return to Asia with the launch of Tokyo and Shanghai routes in the winter 2016/2017 season, it is known to be interested in launching other Asian routes as well including Delhi. Therefore Iberia can become a good partner for the launch of direct flight on Delhi-Madrid route with possible code-share arrangement on its Central and South American routes. Currently, those areas are totally neglected in Delhi Airport’s network.

Iberia's South and Central American representative schedule


Route
Flight No.
Origin: Departure
Destination: Arrival
Frequency
MAD-EZE
IB 6845
Madrid: 12:00
Buenos Aires: 20:55
1,2,3,5,6,7
IB 6841
Madrid: 23:45
Buenos Aires: 08:35+1
Daily
MAD-GRU
IB 6827
Madrid: 00:30
Sao Paulo: 07:30
Daily
IB 6821
Madrid: 12:00
Sao Paulo: 19:10
1,2,4,5
MAD-GIG
IB 6025
Madrid: 11:45
Rio de Janeiro: 18:30
1,2,3,5,6,7
MAD-LIM
IB 6651
Madrid: 13:00
Lima: 18:50
Daily
MAD-BOG
IB 6585
Madrid: 12:00
Bogota: 16:20
Daily
MAD-MEX
IB 6403
Madrid: 13:05
Mexico City: 18:25
Daily
IB 6409
Madrid: 23:45
Mexico City: 05:00+1
Daily
MAD-SJO
IB 6313
Madrid: 11:40
San Jose: 15:40
Daily
MAD-PTY
IB 6361
Madrid: 12:10
Panama: 16:50
Daily

But most of Iberia’s long-haul flights to Central and South America have Madrid departures around mid-day (11:30-13:30) which would require Delhi-Madrid flight to have early morning (around 5:00) departure from Delhi in order to have convenient transit time at Madrid Airport. But the current Air India’s network has afternoon departures of all its European flights (Birmingham, Frankfurt, London, Milan, Moscow, Paris, Rome & Vienna). It won’t be suitable for Jet Airways either as it won’t be possible to get traffic feed from its domestic as well as short-haul international network. Vistara, which already has commercial tie-ups with Oneworld members like British Airways and Japan Airlines, can forge a code-share agreement with Iberia but it also faces similar challenges regarding the departure schedule.

Note:
* Haneda Airport, the 3rd busiest airports in Asia has no direct flight to Delhi but the Tokyo-Delhi route is well served from Narita Airport. 
* Gatwick Airport, the 9th busiest airports in Europe has no direct flight to Delhi but the London-Delhi route is well served from Heathrow Airport.


5 comments:

  1. Again a thoroughly researched article. Thanks for the insight !

    I have a couple questions:
    1) You say about the O&D traffic between Manila and Delhi -" The tally reaches around 90 daily passengers (one way) if we consider the estimated 20% jump in O&D passenger traffic with launch of direct flight. With this level of demand there is a prospect for daily narrow-body flight on the route, possibly with Airbus A319 (Air India: 122 seater A319) or Boeing 737-700 (Jet Airways: 134 seater B737-700) which can provide relatively longer range with less seat-capacity resulting moderate to good loads."

    However, owing to the transit times, you further suggest that
    " And the most likely option is Delhi-Manila route be served with double daily narrow-body flights or 2 wide-body flights on Delhi-Manila-Mumbai and Mumbai-Manila-Delhi routes like Air India does with its Bangkok service."


    Its either the first option or the second. Which one do you think is the better alternative?


    2) Secondly, the DEL-MAD flight can also depart between 1 am - 3 am. AI has 4 flights between those hours to LHR, JFK, ORD and SFO. So this won't take a major toll on the personnel if they were to operate the route.

    Granted that this would involve longer layovers at MAD than are ideal (3-4 hours), but I'd argue that 1-2 hours short layovers won't be most practical for onwards travel to South America. Currently, you have to have a schengen visa to even transit through MAD. Or in the very least, a special airport transit visa.
    So you potentially have to go through immigration, enter Spain, go through security again and then board the flight. 1-2 hours would be pushing it for most travellers.

    ReplyDelete
    Replies
    1. Thanks Deovrat for giving a serious look at the blog.

      On your first question,
      In my personal opinion double-daily narrow-body flight on DEL-MNL is better as it increases the choices for the transit passengers (domestic as well as int'l). However critics may question the viability of double daily flight on the route. But I have shown how traffic feeds at DEL can be used to feel those flights. I have mentioned the DEL-MNL-BOM & BOM-MNL-DEL wide-body option as well to give the full picture.

      On your second question,
      Yes, transiting through Madrid may not be a convenient option due to several reasons mentioned above and Air India being Star Alliance member how much it is willing to coordinate with Oneworld member in questionable. If implemented properly, traffic feed from Asian & domestic network alone with O&D demand will be adequate for wide-body flight on the DEL-MAD route. Therefore no genuine need to consider onward connection from Madrid.

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    2. Dear Soumen,

      Agreed Re: first question. DEL-MNL-BOM and vice-versa widebodies can be used. However, lets consider who are potential contenders to operate the route. AI and 9W are the prime contenders. 6E and SG are not much interested in International expansion at this point as your own analysis has showed. UK is bound by 5/20 rule right now.

      AI has recently admitted that their triangular routes were a failure and withdrew them in favour of reduced frequency direct routes, examples being DEL-SYD-MEL-DEL and DEL-FCO-MXP-DEL routes being readjusted. So if AI were to operate this route, I doubt it'll be a widebody; more like an A319 as you have mentioned above.

      9W on the other hand, does not do many triangular routes, especially internationally. In Southeast Asia, their only "adventurous" route might be BKK-SGN fifth freedom route, and that too being BOM-BKK-SGN-BKK-BOM. That one is operated by a 737 too, not a widebody.

      My point being, given the demand between the MNL and DEL/BOM, it might be prudent to choose a DEL-MNL-BOM route, but with a narrowbody to start off with instead of a widebody as suggested.


      Re: Point 2, fully agree that even without considering onward connections, MAD generates enough O&D to sustain the route itself.

      Delete
  2. I had this route in mind for long. Manil has more business relations with Bangalore than diplomatic / transit access of Delhi.

    I am wondering why cannot there be a Bangalore /chennai - Phuket -Manila route?

    I assume the occupancy will not be great with direct Manila route but if Phuket is added, the load factor may increase. Presently only Malaysian offers best transit to manila from bangalore. Could this route be executes? !

    ReplyDelete
  3. Great information! For everyone who need to know about price of Taxi in Manila international airport, please contact with GoAsiaDayTrip - the most trusted airport transfer and day tour company in Southeast Asia.

    ReplyDelete