ANALYSIS: Tata SIA to be a textbook hub carrier

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The proposed route network of Tata SIA Airlines will evolve to provide powerful feed into Singapore Airlines at the New Delhi hub.

During last week’s earnings briefing to discuss its FY2013/14 results, SIA chief executive Goh Choon Phong said that Tata SIA will be independently run, with an eye to its own profitability. As with SIA’s other overseas ventures, namely Virgin Australia, and its local low-cost units Tigerair and Scoot, Goh stressed that the new venture will be its own show.

In short, the message is that the new carrier (which is 51% owned by Tata Sons) will not be run for the benefit of SIA, but for its own success.

Nonetheless, a cursory examination of the the new carrier’s proposed route network – which India’s Civil Aviation Department published last week – suggests that irrespective of who calls the shots at Tata SIA, its future is intimately intertwined with that of SIA.

The network proposal details Tata SIA’s capacity and routes for the first four years of its existance. What is clear is that Tata SIA will not try to avoid the rough and tumble of two of India’s most competitive routes: New Delhi-Mumbai and New Delhi-Bengaluru.

All three of these cities are also major SIA destinations, so it is unclear the level of feed they will generate for New Delhi.

The Mumbai and Bengaluru routes aside, SIA Tata will ultimately become a textbook hub-and-spoke operation centered on New Delhi, giving SIA access to second tier cities in India’s hinterland, and creating an opportuity to feed flights bound for SIA’s Changi hub.

Proposed Tata-SIA network in April 2014 - blue lines denote SIA operated flights

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FlightMaps Analytics

In April 2015, when Tata SIA should have been up and running for over half a year, SIA will operate 22,000 seats on the Singapore-New Delhi route. FlightMaps shows that 13,000 seats of this capacity will be provided with Airbus A380 aircraft, and 8,550 with A330s – suggesting SIA will drop Boeing 777s from the route altogether.

Four years into Tata SIA’s development, the hub case is even more compelling. Not counting services from Mumbai, Bengaluru, and Hyderabad, SIA Tata’s New Delhi hub will be receiving traffic from up to 17 Indian cities, with frequencies ranging from daily to three-times-daily.

The carrier will initially operate 20 leased Airbus A320s, with the first example due to arrive in September – the DGCA documents show that the carrier intends to start service on 1 September 2014. The lessor for the aircraft is Singapore-based BOC Aviation.

Proposed Tata SIA network in 2018

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FlightMaps Analytics