May 31, 2018 / 8:41 AM / in 6 months

Sydney Airport targets India as next key growth market

SYDNEY (Reuters) - Sydney Airport Holdings Pty Ltd, a major beneficiary of China’s outbound tourism boom, is targeting India as the next big international growth market, its CEO said on Thursday.

Passengers walk with their luggage towards departure gates at Sydney International Airport in Australia, October 25, 2017. Picture taken October 25, 2017. REUTERS/Steven Saphore/Files

Australia’s biggest airport has non-stop services to 17 cities in mainland China, up from three a decade ago. The number of Chinese passengers has trebled over that period, contributing to strong earnings growth for the airport operator.

In contrast, there is only one direct link between Sydney and India - an Air India service that operates five days a week from New Delhi. This is despite the fact that India is the eighth-biggest source country for travellers to Australia.

Spending by Indian tourists, many of whom connect at Asian hubs like Singapore and Kuala Lumpur before reaching Australia, rose 16 percent to a record A$1.4 billion ($1 billion) in 2017.

“Our history and experience tells us if you put a direct flight on, you unlock that latent demand,” Sydney Airport CEO Geoff Culbert told Reuters in an interview on Thursday.

“And so we see the opportunity for a number of the other major cities in India, places like Mumbai and Bangalore.”

Tourism Australia describes India as being “underserved” in terms of aviation links.

Culbert said during a visit to India this month he met with several airlines to discuss adding services to Australia, offering financial incentives packages for the first year to ensure the flights would be viable.

“Interestingly they are not talking about do I put on a new route to Sydney versus Melbourne or Sydney versus Brisbane.

“They are deciding between a route to Sydney versus another daily service to London which they know is a proven route. So we have to make sure we are providing the most competitive products to encourage them to fly down,” he said.

Indian airlines IndiGo, SpiceJet Ltd and Vistara have been examining widebody jet orders that could allow them to compete against rivals Air India and Jet Airways on lengthier international routes, including to Australia.

Tourism Australia, the country’s tourism marketing organisation, is also targeting India as a key growth market as the Australian economy shifts increasingly from commodities exports towards services like tourism and education.

“India is performing strongly but additional direct flights would be a huge step towards unlocking the market’s enormous future potential,” Tourism Australia Managing Director John O’Sullivan said via email.

($1 = 1.3200 Australian dollars)

Reporting by Jamie Freed; Editing by Himani Sarkar

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