Tag Archives: GDP

Govt declines United-Emirates code-share on India routes

The Indian government has declined permission for United Airlines to code-share with Emirates on routes originating from India, citing the absence of a traffic rights agreement between India and Dubai for these routes, BW Business World.

This decision disrupts the significant agreement signed between the two airlines last year, which aimed to enhance their network connectivity to India. Codeshare flights enable airlines to jointly market a specific route, expanding their network and improving aircraft occupancy.

Emirates President Tim Clark confirmed that United Airlines had approached the Indian government to request permission for their codeshare on Emirates flights from India. However, the government did not grant approval for this arrangement. Clark acknowledged the difficulty of the situation and acknowledged that the decision stands.

The codeshare agreement would have covered 27 destinations on the Emirates network, with a substantial portion of these routes being to India.

Government officials explained to a media house that the bilateral arrangement between India and Dubai does not permit a third airline to utilise the available seats.

United Airlines will be adversely affected by India’s stance, as they have been compelled to cancel their direct flights from New Delhi due to the closure of Russian airspace for US carriers. The closure of this airspace has substantially increased operating costs for American airlines and has resulted in United cancelling four routes, including the San Francisco to New Delhi and Newark to Mumbai routes.

United CEO Scott Kirby expressed that if Russian airspace were to reopen, the airline would swiftly increase capacity on flights to India.

India has halted the extension of flying rights to Middle Eastern countries to encourage its domestic carriers to operate wide-body aircraft and provide direct connectivity to North America and Europe.

Clark stated that this approach has adversely affected both Emirates and India, as the airline has been unable to grow since 2015. Currently, both Indian and UAE carriers are permitted to operate 60,000 seats per week, and they have nearly exhausted their allotted quota.

Clark commented on India’s stance, stating that the country has always been somewhat enigmatic regarding granting access to Emirates. He noted that this position does not benefit anyone, considering India’s high GDP growth and large non-resident Indian population who seek travel opportunities. Clark expressed his belief that a protectionist approach does not facilitate the growth of domestic airlines.

He pointed to Turkey as an example, explaining that by opening up, strengthening their own airline and establishing Istanbul as a major hub for global connections, Turkey has reaped substantial benefits. (Source: BW Business World)

 

Vision 2030: 100mn tourists annually; WTTC commits over USD 10bn investments to Saudi Arabia at Global Summit

The recently concluded WTTC Global Summit brought the global spotlight on the host country, the Kingdom of Saudi Arabia (KSA). World tourism leaders and members of WTTC have pledged investment worth USD 10.5 billion in the coming five years in Saudi Arabia, said Julia Simpson, President & CEO, WTTC.

This announcement comes at a time when the Kingdom has set its sights on raising its international profile to emerge as a competitive tourism player, globally, with an aim of welcoming 100 million visitors, annually, by 2030.

Having identified tourism as an important revenue generator and its potential to contribute more than 10% to its GDP, the KSA has earmarked a budget of USD 500 billion towards tourism development and special projects. This ambitious multi-billion dollar target spend will be utilised in realising its Vision 2030, an economic, social and transformative plan to  elevate the Kingdom’s international profile, keeping in mind the target to attract 100 million visitors by 2030.

Talking about this plan, Alhasan Ali Aldabbagh, President, APAC Markets, Saudi Tourism Authority, said, “Tourism is the core of Vision 2030. And as part of this vision by 2030 we want to achieve 100 million visits in Saudi Arabia. This is very ambitious. We want to make Saudi one of the top five destinations in the world for tourism. We have already set out on a road map to achieve this target going forward, and also to increase our tourism GDP to 10 per cent by 2030,” informed Aldabbagh. In 2021, Saudi clocked 62 million visits, which were predominantly domestic tourists and only around three million international visitors.

The Vision 2030 entails huge infrastructure development of new cities, entertainment and cultural complexes, world-class accommodation options, construction projects as well as leisure tourism sites.

 

India T&T sector to post annual growth rate of over 10% during 2019-28: IBEF

The travel and tourism industry’s direct contribution to India’s Gross Domestic Product (GDP) is expected to post an annual growth rate of 10.35 per cent between 2019 and 2028, according to a report by the Indian Brand Equity Foundation (IBEF), an Indian government trust, reports Shivangi Gupta for Moneycontrol.

In 2020, the travel and tourism industry’s contribution to GDP was USD 121.9 billion; the figure is expected to reach USD 512 billion by 2028, said the report, which comes at a time the sector is bouncing back from a pandemic-induced downturn.

The pandemic dented travel and tourism globally, causing the industry a loss of almost USD 4.5 trillion. Domestic visitor spending decreased by 45 per cent, while international visitor spending declined by 69.4 per cent compared to 2019, according to an estimate by the World Travel & Tourism Council.

Vinutaa S, Assistant VP, ICRA Limited, said, “The hotel industry has witnessed a healthy recovery in demand over the last 2-3 months. Leisure travel, transient demand, MICE/weddings and gradual pick-up in business/diplomat travel have been the primary demand drivers. Although FTAs have been reasonably healthy in April and May 2022, FTA recovery to pre-COVID levels could be a few months away and domestic tourism will be the prime demand driver.”

“ICRA estimates pan-India premium hotel occupancy to be ~54-56 percent in 2M FY2023. Pan-India premium hotel ARRs stood at ~Rs. 4,500 – 4,600 in 2M FY2023 and were only at a 10-15 percent discount to pre-Covid levels. Leisure destinations and some high-end hotels reported occupancy and ARRs higher than pre-Covid levels, with the surge in demand. ICRA currently expects the industry revenues and margins are expected to reach pre-Covid levels by FY2023,” Vinutaa added.

ICRA expects international air passenger traffic at Indian airports to rise 80-85 percent this fiscal year. By May, traffic had already increased by 72 percent over pre-COVID levels, according to a PTI report.

From January to March 2022, domestic airlines carried 248.00 lakh passengers, an increase of 6.06 percent year on year.

A Highway Harangue

The joys of launching amazing highways in India will be still-born unless the users are made to live up to it.

India leads the world in traffic-related deaths. In fact the high rate of accidents and bad state of roads drags back the GDP by at least 3 points.

In the light of the above sorry facts, it is heartening to note the rather blitzkrieg pace of road construction and highway development over the last six years. However, it will be well-served to not uncork the bubbly just yet.

Even diehard critics of the government aver that if it really continues at this speed, in the next three years, the network of good road connectivity between many major cities and even some Tier-II towns would be almost comparable to much advanced countries.

Unfortunately, this is where the comparison might end. The reason is not difficult to fathom. Good roads themselves will not bring any change unless it comes with good traffic sense.

It is not the brief of this forum to castigate, bemoan or come up with I-knew-it noises. Rather, as an industry, solely built upon and surviving on happy experiences, we should underline and push for positive movements in the worst of circumstances.

Travel is about positive feelings and good roads are an integral part of that experience. It is music to the ears that with 36.4 km of roads built per day, national highway construction in India hit an all-time high in the 2020-21 fiscal despite the pandemic. In fact, the Ministry overseeing highways development built 13,298 km in 2020-21, which is up from 10,237 km in 2019-20.

Good roads and better traffic sense are the two legs on which development will stand. This is what the industry should be demanding (besides the usual support asked for in knee jerk reactions in extenuating circumstances).

The clamour for stricter traffic laws and their implementation should rise from our side. The least that can be asked for is no tolerance to traffic rule impingement on the new highways which are regularly inaugurated with much fanfare. Traffic and public behaviour on new highways can be monitored effectively as they are built with suitable technological support towards that end.

The best road networks will fail to remedy the situation unless stiff penalties ensure adherence to the law. The time is ripe for further fine-honing of the Motor Vehicle Amendment Act 2019 and Motor Vehicle rules.

 

The views expressed in the column are of the authour, and may or may not be endorsed by the publication.

IAAI applauds Kerala’s decision to form Welfare Board for tourism employees

The IATA Agents Association of India (IAAI) National Committee & Kerala State Committee meetings have expressed gratitude to the Chief Minister and Tourism Minister of Kerala for initiating to form Welfare Board for the employees working in tourism industry. The formation of a Welfare Board for travel and tourism industry employees was one of the essential demands submitted by IAAI.

A Welfare Board for the employees working in tourism industry is a unique decision in our country which will boost the restoration to travel and tourism. This initiative shows a new level of responsibility and leadership quality from the state government towards the industry, an unorganised sector and constitutes 10 per cent of Kerala’s GDP and contributes around 23.5 per cent to the total employment in the state, IAAI said in a statement.

Considering the relentless efforts to be undertaken for taking the country forward, IAAI offered its willingness to support and complement the revival of Kerala tourism. Since the catastrophic floods, Nipah virus, and the rampant spread of coronavirus shattered the tourism sector and left thousands of employees in peril, IAAI is proposing a facelift for the industry with a tagline – “Let’s Revive Kerala Tourism”. In addition, IAAI’s Tourism experts committee and IAAI’s new initiative Air Passengers Right Forum (APRF) jointly work on a proposal for submission to Kerala government, emphasising the requirement of a multi-transportation system in the state.

IAAI’s proposal encompasses an aerial connectivity project based on the UDAN regional connectivity scheme under the National Civil Aviation Policy of 2017, within the purview and framework of DGCA, conducive to Kerala’s local requirements and market conditions. And coordinated networking of regional airports and new airstrips to cater to smaller aircraft, seaplane, and helicopter services to provide last-minute connectivity for all tourist destinations in Kerala and extend to other south Indian states.

IAAI National President Biji Eapen chaired the meeting, and Directors Manu T. Nair and Aruna Shetty, Air Passenger Rights Forum Legal Advisor Adv. Ajith Marath, IAAI Kerala State President Ganesh Vaderi and Secretary Antu Chakkiyath also attended the meetings.