As India witnesses a surge in outbound travel, recent visa-free travel announcements by Southeast Asian nations like Thailand and Malaysia have captured attention. While Thailand’s move sparked enthusiasm, the scenario is different for Indian carriers eyeing the Malaysia route, presenting both challenges and potential opportunities.
The Malaysia Experience
Unlike Thailand, Malaysia’s history with a visa-free regime for Indians has been checkered. In 2010, Malaysia abruptly withdrew the scheme, citing concerns over illegal immigration. However, the recent announcement does not specify an end date for visa-free travel, allowing Indian tourists a 30-day multi-entry window.
Indian Aviation Landscape
With 183 weekly frequencies between India and Malaysia, the aviation landscape is dominated by Malaysia Airlines and AirAsia. Malaysia Airlines holds a 35 percent seat share, closely followed by AirAsia with 33 percent. The AirAsia group, including long-haul subsidiary AirAsia X, commands 43 percent of the total capacity. In this competitive environment, Indian carriers face limited opportunities to leverage the visa-free regime.
| Airline | Monthly Seats Each Way | Percentage of Seats |
|---|---|---|
| Malaysia Airlines | 51,077 | 35% |
| Batik Air Malaysia | 22,644 | 15% |
| Batik Air Indonesia | 4,860 | 3% |
| AirAsia Bhd | 48,186 | 33% |
| AirAsia X | 15,212 | 10% |
| IndiGo | 5,400 | 4% |
Entry Point for Air India Express?
While IndiGo holds a mere 4 percent capacity share, the prospect of expanding operations to capitalize on the visa-free period may not align with its current challenges, including grounded aircraft. This opens an opportunity for Air India Express, the low-cost subsidiary of Air India, to make strategic inroads into the market. With a focus on the origin-destination segment, Air India Express could tap into the cultural ties and ethnic Indian population in Malaysia.
Potential Challenges and Opportunities
IndiGo, facing aircraft-related challenges, might not prioritize Kuala Lumpur expansion. In contrast, Air India Express, with a growing fleet, refreshed branding, and the tailwind of visa-free entry, could gain a competitive edge. The focus on the core market involving business travelers and visitors to friends and relatives aligns with the airline’s strengths.
