“Now, San Francisco, home to the Silicon Valley, is added to the Air India network with a nonstop service to Delhi thrice a week from 2 December 2015,” said Air India while announcing the proposed flight whose viability is feared to be doubtful. Dubbed as a gift by Prime Minister Narendra Modi to the Indian diaspora of the Silicon Valley — a leading hub and startup ecosystem for high-tech innovation and development — this non-stop service will provide Air India with a point of differentiation. “This will appeal to some business travelers who will appreciate the shorter journey, as well as passengers travelling to visit family, especially seniors who may feel more comfortable with the language and food on an Indian carrier,” says Binit Somaia, senior aviation analyst, Centre for Aviation (CAPA). Moreover, they do not have to worry about changing planes at a foreign airport.
San Francisco is the international city which has the highest traffic to/from India currently without a non-stop service. So, Air India was a prime candidate for such an operation. Given the large population of Indians residing in Silicon Valley, India-San Francisco is a very attractive route with strong traffic flows driven by business related to the IT industry. But, as the two cities — New Delhi and San Francisco — are on opposite sides of the world, there are many different options to travel between them. Passengers can fly via Asia, the Gulf, Europe or other North American gateways. “So, competition will be intense,” says Somaia. This is where Air-India, India’s loss making national carrier, would have to prove its mettle.
Competing with Gulf, American and European carriers, known for their quality services, would not be a cakewalk for Air-India. Moreover, as long haul flights are generally tiring, especially for economy class travelers, many US bound Indian passengers might prefer stopovers over a non-stop option.
Air-India’s already flies to three destinations in America (Newark, New York and Chicago) and all these run below the required occupancy levels thus, questioning the viability of the new operation. To assume that this operation would turnaround the loss-making national carrier would be a quite far-fetched. “The San Francisco route will only account for a very small proportion of Air India’s total operations so even if the route is profitable, a single route alone cannot turnaround the whole airline” says Somaia.
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