Untapped direct flight destination: Bali, Indonesia
If you're the CEO of any India based airline looking to expand your network what should be the destinations you should consider?
In order for airlines to consider a new destination, usually following are the criteria
1. There should be enough people flying everyday between the two cities, so that plane seats do not go empty
2. Better if competition is not tough
3. Regulatory approvals between the two countries, anti competition/anti trust laws etc
When Air India decided to introduce direct flight from Delhi to Denmark or when KLM decided to reintroduce Mumbai- Amsterdam, their team would have analyzed passenger and cargo data over years to see how many people fly between the two cities and what is the probability of their planes running reasonably full if they add a new flight.
Bali has beautiful temples and beaches. It has nice waterfalls, rice terraces, calm forests and mountains. It is not an expensive destinations to visit. Indonesia tourism is trying hard to sell Bali as a destination to Indians and many Indians are heading to Bali now than ever. No one who came back from Bali has complained that they didn't like it. Almost everyone wanted to go back again.
May be their biggest question is from where to fly to Bali directly? If they launch Mumbai-Bali, would Delhi or Chennai based customer prefer to fly to Mumbai, connect to Bali or would he go with budget airlines to Kuala Lumpur or Changi and connect to Bali? Or should it be from Chennai, which is geographically closest to Bali? (like how SpiceJet and Air India fly to Male, Maldives from Kochi/Trivandrum). I think this risk they have to take anyhow. Consider one or two cities most likely to give highest load factor, fly say 3 times a week from each and assess the passenger response. If it is good, frequency can be increased or more cities can be considered.
Fares: Normal return fares to Bali on a budget airline now averages to about 25k-30 INR. During sale, it can be as low as 13-15k. If there's a direct flight many would prefer that even if it is few k expensive. Say if I can depart on Friday night, arrive Saturday early morning, spend weekend + may be 2 more days and return mid week, it will be more convenient than spending 12-16 hours it currently takes to reach Bali. Full service airlines may target regular seats at 25-30k return fare and budget airlines should target sub 20k pricing to win customers over Malindo/Air Asia/Scoot/ Silk air that take Indian passengers to Bali with one stop at their hubs.
Indians get free visa on arrival at Bali, so a direct flight will probably make some more customers consider Bali instead of Thailand or Singapore
What do you think? Do you have a better destination in mind than Bali that you wish airlines to evaluate direct flights to? Share your thoughts below.
More posts on Bali: Bali recommended 6 day offbeat itinerary * Bike rental in Bali * Read my other posts on Bali here *
In order for airlines to consider a new destination, usually following are the criteria
1. There should be enough people flying everyday between the two cities, so that plane seats do not go empty
2. Better if competition is not tough
3. Regulatory approvals between the two countries, anti competition/anti trust laws etc
When Air India decided to introduce direct flight from Delhi to Denmark or when KLM decided to reintroduce Mumbai- Amsterdam, their team would have analyzed passenger and cargo data over years to see how many people fly between the two cities and what is the probability of their planes running reasonably full if they add a new flight.
From India, there're many countries that are not connected directly. Countries in South America are probably too far and not regularly visited by Indians to fill a plane, so may not be right candidates. But many destinations in Asia are still not served by India based airlines and passengers are forced to take one stop flight via Singapore or Kuala Lumpur. Of all such cities that come to my mind, top of the list is Bali, Indonesia.
Bali has beautiful temples and beaches. It has nice waterfalls, rice terraces, calm forests and mountains. It is not an expensive destinations to visit. Indonesia tourism is trying hard to sell Bali as a destination to Indians and many Indians are heading to Bali now than ever. No one who came back from Bali has complained that they didn't like it. Almost everyone wanted to go back again.
- Are there lots of Indians visiting Bali? Yes
- Is there tough competition? No (no one is flying direct to Bali now) but in terms of pricing it may be hard to beat Air Asia
- Regulatory approvals: I don't know much about this but can't see any reason why govts would object to a direct flight between India and Indonesia
May be their biggest question is from where to fly to Bali directly? If they launch Mumbai-Bali, would Delhi or Chennai based customer prefer to fly to Mumbai, connect to Bali or would he go with budget airlines to Kuala Lumpur or Changi and connect to Bali? Or should it be from Chennai, which is geographically closest to Bali? (like how SpiceJet and Air India fly to Male, Maldives from Kochi/Trivandrum). I think this risk they have to take anyhow. Consider one or two cities most likely to give highest load factor, fly say 3 times a week from each and assess the passenger response. If it is good, frequency can be increased or more cities can be considered.
Fares: Normal return fares to Bali on a budget airline now averages to about 25k-30 INR. During sale, it can be as low as 13-15k. If there's a direct flight many would prefer that even if it is few k expensive. Say if I can depart on Friday night, arrive Saturday early morning, spend weekend + may be 2 more days and return mid week, it will be more convenient than spending 12-16 hours it currently takes to reach Bali. Full service airlines may target regular seats at 25-30k return fare and budget airlines should target sub 20k pricing to win customers over Malindo/Air Asia/Scoot/ Silk air that take Indian passengers to Bali with one stop at their hubs.
Indians get free visa on arrival at Bali, so a direct flight will probably make some more customers consider Bali instead of Thailand or Singapore
What do you think? Do you have a better destination in mind than Bali that you wish airlines to evaluate direct flights to? Share your thoughts below.
More posts on Bali: Bali recommended 6 day offbeat itinerary * Bike rental in Bali * Read my other posts on Bali here *
Nice to visit your new blog. Informative posts.
ReplyDeleteBest wishes.