Low-cost, long-haul flights from India to boost leisure travel

MUMBAI (Reuters): The launch of low-cost, long-haul flights by Indian airlines will boost outbound leisure travel and open a multi-billion dollar opportunity for carriers, a report released on Wednesday showed.

The analysis by aviation consultant CAPA India and online travel agent Expedia Inc comes as large budget airlines IndiGo and SpiceJet Ltd draw up plans to fly as far as Europe and the United States.

The carriers have so far focused on shorter-range destinations such as Sri Lanka and Thailand.

Only 0.3% of Indians currently travel abroad for a holiday every year, a fraction of the estimated 100 million who could potentially afford to do so, CAPA’s analysis of household income shows. Most Indians travel for education, business or to visit friends and relatives.

Tourism spending by Indians could rise to as much as $40 billion by 2027 from about $16.4 billion in 2016, CAPA said, ranking it sixth in the world ahead of Canada, South Korea and Australia.

“If there is any market where low-cost, long-haul can work it is India,” CAPA India CEO Kapil Kaul said at an aviation conference in Mumbai on Tuesday, citing its geographic location and a large order pipeline for new long-range narrowbody jets. 

SpiceJet Chairman Ajay Singh said on Tuesday low-cost long haul flights will be introduced as early as this winter.

IndiGo is exploring long-haul operations and seeking rights to routes, parent InterGlobe Aviation Ltd told analysts last week.