France caused a stir a few years ago with its proposed ban on domestic flights where there was an alternative regular rail connection. European regulators have now backed the law, designed to reduce carbon emissions, but it will only affect three routes – from Paris Orly to Bordeaux, Nantes and Lyon. Excluded are connections between these cities and the capital’s main airport, Charles de Gaulle, because getting there by train takes longer than a threshold of 2h 30min.
Not everyone is convinced such top-down interventions work anyway. People fly ultra-short-haul not because they relish security queues and the other inconveniences of airline travel but because it is cheaper and quicker. When there is a reliable and reasonably priced rail option, such as Eurostar between London and Paris or Brussels, travelers tend to choose it over flying regardless. Many would argue that the solution is improving rail travel, rather than barring airlines from a market.
India has long been a sleeping giant of commercial aviation because of its size, growing economy and burgeoning middle class. However, poor infrastructure and a dysfunctional airline sector have hampered its growth. Could this be set to change? Tata Group hopes that consolidating its airline units, including the former state-owned Air India as well as AirAsia India and Vistara, into one brand will create a much stronger dominant domestic operator to compete with low-cost leader IndiGo.
Air India is key. Civil servants and politicians have mismanaged the carrier for decades. Tata has brought in as its new boss former Singapore Airlines executive Campbell Wilson, with a mandate to implement big changes. The merged Air India and Vistara will still only have half IndiGo’s market share, with the likes of Spicejet, GoFirst and Akasa making up the rest. Several other airlines have fallen by the wayside in the past decade, unable to compete in a highly price sensitive market.
In the wider Asia-Pacific region, the ongoing relaxation of Covid-19 travel restrictions continues to benefit the industry. Latest IATA figures for October show airline traffic at almost three-quarters of pre-pandemic levels, and 44% higher than a year ago. Growing international travel is driving the improvement as more long-haul services return. Domestic traffic was, in fact, slightly down year-on-year, largely a result of China’s zero-Covid policies, which have if anything intensified.
One of the main beneficiaries of a more liberal environment for international travel is Qantas, which is reinstating its sixth Airbus A380 this month. The Australian flag-carrier, which put its 10 superjumbos in storage over the pandemic, is also reintroducing certain US and Japanese routes with A330s and Boeing 787s. It comes as Qantas prepares for Australia’s summer tourist season, reporting “continued strength” in travel demand.
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