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Thursday, December 06, 2007

Vancouver could see a new, non-stop plane service to Delhi

A young, splashy airline from India wants to launch non-stop flights from Delhi to Vancouver that would cut travel time on this popular route by as much as 10 hours.

Indo-Canadian business leaders welcomed early news of this interest by Mumbai-based Kingfisher Airlines. In May, many of them pilloried Air Canada for ending all its flights to India so that it could boost them to China.

However, even as Premier Gordon Campbell's office said that this "building of better transportation links between B.C. and India will build on already-close social, cultural and business relationships that exist between our two jurisdictions," the timeline on when Kingfisher could launch such a service is still very fuzzy.

Kingfisher is owned by United Breweries Group, a family-run beer and liquor empire headed by Vijay Mallya, who is often described as India's Richard Branson. Forbes magazine estimates his current net worth at $1.5 billion and he made headlines this year in Europe after buying Scotch whisky maker Whyte & Mackay and becoming a joint owner of the Dutch Spyker Formula One racing team.

Mallya has always stood out in conservative corporate India, but as the country's middle class rises, his trademark love of the good life - boozy yacht parties, a collection of 250 classic cars like Rolls-Royces, some 40 residences around the world - actually meshes with the aspirations of this younger and more free-spending demographic.

Kingfisher currently serves over 30 cities in India, but it does not yet fly internationally. In filings for regulatory approval, it has expressed interest in serving a U.S. West Coast destination and has publicly named New York for a August 2008 launch.

There is, however, a possible hitch to these expansion plans. The Ministry of Civil Aviation, which governs India's airline industry, does not allow domestic airlines that are less than five years old fly internationally. Kingfisher, founded in 2005, could get around this rule by buying a rival Indian airline, Air Deccan, which is more established. Alternatively, Kingfisher might push the government to review the law. Mallya is also a member of India's parliament.

The Vancouver Sun sent an e-mail to Mallaya's direct account at UB Group as well as a media relations officer, but both were unanswered by deadline on Monday. Premier Campbell, who met with Mallya on Monday as part of his trade mission in India, was also unavailable.

Vancouver's appeal as a market is clear considering that, in 2006, it was the seventh largest source of North American passengers to India. More specifically, it was the fourth-largest source of North American passengers to Delhi, outpacing Los Angeles, Chicago and Washington.

At the moment, going from Vancouver to India involves flying first to cities in Asia (Hong Kong, Singapore, Tokyo) or Europe (Frankfurt, Brussels, Amsterdam) before connecting on to India.

"Whichever way you go, it can take between 22 to 25 hours to get there," said John Korenic, marketing director at YVR. "I have done it. It is quite an arduous trip."

Kingfisher's non-stop flight would mean just a 15-hour journey. "Once you start non-stop operations, you very much stimulate the market" in terms of both tourism and trade, said Korenic. "It's so much easier flying on a non-stop. There is enormous opportunity."

Other observers agree. "We found that the type of volumes that Kingfisher [or any other airline] could see would give them significant first mover advantage because of the high share of the Visiting Family and Relatives (VFR) willing to pay a non-stop premium to fly from Vancouver to Delhi," said Nizar Assanie, a vice-president at Vancouver-based IE Market Research Corp. who also sits on the board of the Canada-India Business Council's B.C. chapter.

"Anecdotally, I have talked to my network [who go to India quite often] and in all instances, they were willing to pay the extra premium to save the time it takes to fly to India."

He added: "There is a significant 'catchment area' behind Delhi and behind Vancouver. Key to the success of the route will be the ability to get connections to places like Amritsar, Bangalore, Mumbai, Chennai, and other Canadian and U.S. destinations, such as Toronto."

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