Nothing should stop direct flights now

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Asia New Zealand Foundation

Is distance a barrier to links between India and New Zealand? India has always been more than a single non-stop flight away, unlike destinations within ASEAN and North Asia. Now, however, the technology exists to make non-stop flights to and from India possible.

Both Air India and Air New Zealand have Boeing 787 aircraft in their fleets that could manage the 16-hour flight time, but they look unlikely to chance their arms on this in the immediate future.

Air New Zealand regards the yield on the sector as insufficient to justify non-stop

flights, which require a very heavy fuel load and thus a potentially smaller payload. Moreover, while New Delhi is the largest single traffic point, accounting for nearly half, the balance is spread across a number of other cities.

Codeshare Options

Of these, Mumbai would be the most significant for outbound traffic from India. Mumbai is the only centre that Air New Zealand is entitled to serve, but as we discuss below it has some useful code-share options.

Air India, which is now a Star Alliance member, crucially has the right to fly directly to Auckland from New Delhi as well as from any other Indian city it wishes.

The nearest it has come so far, though, is Australia. It currently flies from New Delhi to Sydney and Melbourne using a Boeing 787, which has the capability to service New Zealand non-stop as well.

Open Skies Agreement

If direct flights still look problematic, the good news is that Air New Zealand is now

better placed to promote the Indian market with Singapore Airlines.

India long ago came to a generous open-skies arrangement with ASEAN, and one of the many positive results is that Singapore Airlines and its SilkAir affiliate currently service a dozen Indian cities.

Of these, Mumbai, Kolkata, Chennai, Bangalore, Kochi and Hyderabad are specified as third-country code-share destinations in the new ASA.

Thus. Air New Zealand can offer competitively priced tickets to these six cities under its “common metal” revenue-sharing arrangement with Singapore Airlines.

In the case of New Delhi itself, Air New Zealand can code-share with Air India but not with a third-country carrier.

Singapore Airlines is, of course, free to market New Delhi as a destination. That leaves Air India, which once flew to Fiji but has never mounted services to New Zealand.

Using Intermediate Points

With the growing diaspora in New Zealand making its mark, it may eventually be able to contemplate direct flights to Auckland, or adding a Tasman leg to its service to Australia. Both Air New Zealand and Air India may use intermediate points in Australia, Bangkok, Hong Kong or Singapore.

Having its own service to New Zealand might, in turn, strengthen Air India’s hand in marketing India as a stopover destination en route to Europe, something Air New Zealand and Singapore Airlines, which lack beyond rights from India, are less well placed to do.

Do direct flights matter to the growth of the relationship? The short answer has

to be yes, but the verdict may be more nuanced over such long distances

A 2013 study of air services liberalisation in New Zealand by Aaron Schiff and John Small (‘Economic effects of Air Services Liberalisation in New Zealand- Covec Limited)

suggests the main benefit has been to allow competing hub arrangements.

In addition to Singapore, the Malaysian, Thai and Hong Kong carriers (not to mention Emirates and Qantas) can offer good connections to India from New Zealand.

Price-Sensitive Market

India is reputedly a price-sensitive market, meaning hub carriers can try to offset

time increases with cheaper fares. The evidence from China, however, suggests that education services in Australasia have done best between cities serviced by direct flights.

Similarly, the vastly greater tourist growth projections for China underline the difference between markets that enjoy direct air links and those that do not. Arguably direct air services need to become part of the equation between India and New Zealand in the next three or four years.

With Air New Zealand currently excluded from flying to New Delhi (the most logical connection point), making both national carriers eligible to fly there direct by 2020 could be just the boost the relationship will need by then.

India’s June 2016 announcement that it will open its skies for direct services between

destinations over 5000 kms from India may be a helpful pointer.

Editor’s Note: The above is an extract from ‘India and New Zealand: Growing our Connectivity,’ a 38-page report published (PDF format) by the Wellington based Asia New Zealand Foundation’ on October 15, 2016, the day on which the Foundation-sponsored ‘Auckland Diwali 2016’ was held at Aotea Square, Auckland. The Report examines several areas of existing and emerging cooperation between New Zealand and India. Written by Graeme Waters, a former High Commissioner to India and a diplomat with extensive experience, parts of the Report will appear in Indian Newslink in several ensuing issues.

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