Challenges for Airlines entering South Asia

Obstacles to operations are everywhere you look at in airline industry. So what are the obstacles you find in South Asia ?

Let’s take a quick and complete look at the numerous hurdles airlines entering the South Asian markets will have to face.

Regulations

Regulations are something that have historically been tough on airlines. In South Asia, these regulations can be even more tight. The region, including whole Asia, is many years behind their European and U.S counterparts in deregulation and protectionism comes as a natural rule.
Most of the time, you will get the red tape. This comes as a direct result of too much Political involvement . The most favorable solution is offering a bribe. This cycle of hurdles to get things done and having to give a bribe has made corruption almost unremovable from South Asia.
However, the regulations are slowly progressing towards liberalisation and the region is slowly developing a trend of moving into Open Skies.

Airport Infrastructure

Most South Asian airports are still not developed to the world class level except a very few.
An issue that all airlines face is the high operational costs in South Asian airports. In most countries, all airports are owned and operated by a single entity and this monopoly always tends to have a higher price. Not even India is an exception and charges the same rate for every airport since all the airports are governed by a single body.
A key issue mainly concerning to low cost operators is that there aren’t any Low Cost Terminals in South Asia at the moment. Any LCC will have to use the same terminal, service providers and equipment that the full fare carriers use and pay the same amount.

Distribution

In South Asia, the most popular method of ticket booking is still via the travel agencies. Internet penetration is in a low level and this will mean an extra overhead cost to many airlines. However, there are many other innovative methods you can use for distribution if you are set to crack the market.

Apart from these airlines will have to face some natural hurdles such as providing the relevant local food items onboard, localising its brand to the South Asian culture and finding the right local talent. However, luckily there are not any severe weather related issues or any other major operational instabilities.
Do any other major operational hurdles come to your mind ? Please leave a comment.

This is the fifth installment of the South Asia 101 series. Expect the next and final part of the series on Network Contribution from South Asian flights .