South Asia : The Secret of Great Airline Demand

Welcome to the second installment of my South Asia 101 series.
You might launch enough flights to South Asia. But what happens without sufficient demand ?
Today we are going to examine the demand for air travel in South Asia, explore the untapped markets and later on the article, I will reveal some new and innovative methods to stimulate the demand.

Let’s have a little exploration about to where does a good demand exist from some South Asian airports. We’ll keep our research limited to a few markets for the clarity of this article.

Colombo ( CMB ) Sri Lanka
From Colombo, a good demand exists to London, the Middle East and Australia.
Currently SriLankan Airlines is the only carrier operating flights between London and Colombo. Flights to Middle East are on a rather competitive edge with SriLankan, Emirates and Qatar Airways all operating a large number of frequencies being second to none.
The demand to Australia is completely unmet. There exists a demand of around 35,000 seats to Melbourne from CMB. Which is even larger than the demand to Frankfurt or Milan from CMB and larger than the demand to both Paris and Rome together from CMB. To Sydney, there is a demand of around 18,000 seats. In fact, the largest community of Sri Lankans outside their motherland live in Melbourne.
The real reason for SriLankan in not operating to Australia is that the bilateral air service agreement requires four weekly flights to be in place at the beginning of services and that SriLankan does not have enough aircraft to facilitate this.
However, the demand certainly is there and there are many creative routes that could connect Australia and Sri Lanka such as
CMB-SYD-MEL-CMB
CMB-MLE-SYD-MLE-CMB
or even
LHR-CMB-SYD . All three of the above will have a good demand and the last one will be specially successful if you can get regulatory approval as both of these destination sectors have an excellent demand from Colombo.

Dhaka ( DAC ) Bangladesh

Dhaka has a very strong all year demand to the Middle East largely because Bangladesh being a Muslim nation and the large number of Bangladeshi employees working in the Middle East. However, like in Sri Lanka’s case there is a strong competition in the Middle East – Bangladesh market with more than six airlines vying for a larger market share, including but not limited to EK,QR and EY.
In particular to Europe – there is a strong year around demand to Rome, of around 30,000 seats. The national airline, Biman, operates to Europe, including Rome, with its fleet of DC10 aircraft and the lack of a good inflight product will make it easy for any foreign competitor to compete on these routes. There is also a good demand to Manchester and Milan.

Islamabad (ISB) and Lahore (LHE) Pakistan

The strongest demanding sector from ISB and LHR is Manchester.
The demand from both ISB and LHR to MAN is around 230,000 seats which is even bigger than the year around demand between MAN and New York.
Apart from this there is a big demand again into the Middle East.

Most of other markets have their own niche ‘key demand markets’, but most of the time these are destinations from either UK, Germany or Italy and clearly the above are a selected few from destinations that are still untapped to a great extent but have a great potential.

Freight Demand

Thanks to an export driven economy in most of these countries, there is a good freight demand to these South Asia countries. The key freight points can be identified as
Mumbai, Chennai, Colombo, Karachi and Dhaka .
The recession did not hurt these markets much badly as well. However, freight would be advisable to giving a try only if you have a good hub network or serve any good export/import market.

Stimulating the Demand

There is a lot that can be done to highly increase the demand from these markets but still only a few airlines appear to be doing so.

1. Encourage them to fly
It may seem simple, but there’s a big meaning behind it. People do not just fly – or to be precise, fly with you. You have to make them fly. This is what AirAsia has been doing for years and they have reaped great harvests from it. But you really do not need to lower your price to encourage them for flying, there are much easier, cost effective and profitable ways – I’ll be covering this more specifically in ‘Marketing’ section of this tutorial.

2. Show them the benefits of flying and guide them
Believe me, there are lots of people in South Asia who have enough money – but have never taken a flight. This is not because they have are not interested in travelling – they really love to. But they never had the guiding to fly. They do not know where to buy an air ticket or even where you can fly from your local airport. The key reason for this is that the existing airlines were never able to reach these prospective customers. But you can certainly overcome this by using simple and effective marketing tactis that reach them.
Most of these wealthy locals are less educated. Why not advertise in their local language ? It really works.

3. Fare Segmentation and Higher Yield
One very timely and very innovative solution to this is – Premium Economy .
Most South Asians are not comfortable enough to spend money on First class or Business class. But they really want better comfort too and I can safely assure you that Premium Economy is a phenomenon that will work extremely well in this part of the world.
Most of your South Asian passengers will never hesitate to pay a small premium for better benefits and specially, to personally show the others that they fly in a better class . But yet, there is only a handful of airlines that offer Premium Economy class to South Asia.
I will cover this section specifically in ‘Value, and Value of Service Offering’ part of this series.

4. Partner with a Local Outlet
Partnering with a popular local outlet and having your brand name printed on, their takeaway food packets, shop front door or even on the floor, really works. Airline brand awareness is really low in South Asia and when they are aware of you, they will come to you before trying anyone else.
This is a great way to have a more effective brand awareness cost effectively.

5. Offer a Bribe
This is a word that often goes with South Asia. But, relax. We’re talking about an ethical bribe and it’s nothing illegal.
The tactic of offering an incentive still works in South Asia.
But your ‘bribe’ must be differentiated according to the prospective customer group.

For example:
If you’re an airline flying from Katmandu to Dubai, your prospective customers would really appreciate a free coupon for shopping.
If you have more elderly couples flying with you, they would be really glad on a discount offer at a holiday resort.

If you can afford it, offer the little kids flying with you with some nice little ‘your-airline-branded’ toys or stickers. This will have a great and long lasting effect as this little ‘bribe’ is something that will reap you harvest for generations to come.
Just imagine this – you have a choice of three airlines to fly who offer almost the same fare. When you were travelling the same leg six months ago, Airline A offered your three year old son a paper airline model and some stickers last time you flew. Airline B and C offered him nothing and he traveled with you on a flight that had nothing to make him happy. When you are about to book the ticket online, your little one screams ‘Daddy I want to fly with A, I want to fly with A’. Which airline will you fly ?

As I mentioned above, there is a special ‘Marketing’ section for the South Asia 101 series and I will be revealing more niche and effective marketing tactics in it.

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The next installment to theSouth Asia 101 series will be on Value and, the Value of Service Offering.

The photo of passengers boarding the wonderful AirAsia Oakland Raiders A340 was provided by Reuben Whitehouse .

Thank you for reading and stay tuned !