NEW DELHI/SINGAPORE: Indian airlines are turning to the international market in search of better returns as the intensifying fight for a bigger share of the world’s fastest growing domestic market — where price is king — drives down profits.
While global airlines’ profits have been strong since 2015 — though with wide regional variations — Indian carriers are struggling to remain profitable, despite filling nearly 90 percent of their seats and benefiting from a more than doubling of domestic passenger numbers over the last four years.
“It is an incredibly tough domestic market, very price sensitive,” said Stephen Barnes, chief financial officer of Singapore Airlines, which operates an Indian carrier, Vistara, in a joint venture with the Tata Group.
“Commanding a premium for a premium product is hard to do. From our perspective we invested in order to see the business grow internationally. If you look at the results of Indian airlines their performance is better internationally.”
Promotions such as $50 one-way tickets on the two-hour flight from Mumbai to Delhi are easy to find and, with airlines expected to take delivery of more than 500 aircraft over the next five years, pressure on fares and profits is increasing.
India is one of the cheapest domestic airline markets in the world, with an average fare of 13 cents per kilometer flown, according to data from travel firm Rome2Rio, less than half the 27 cents per km average in China and the United States.
Airlines including Vistara, SpiceJet Ltd. and InterGlobe Aviation Ltd’s IndiGo are in talks to buy or lease widebody aircraft as they firm up international growth plans to boost profitability.
There is huge potential for international travel from India, where the domestic aviation market has grown about 20 percent annually in recent years.
Only 0.3 percent of the 1.3 billion population currently travel abroad for a holiday every year, a fraction of the estimated 100 million Indians who could potentially afford to do so, according to an analysis of household income by aviation consultancy, CAPA.
The international market is dominated by foreign carriers but the market share of Indian airlines including Air India and Jet Airways has been climbing, helped by policies that limit access by foreign carriers, and reached about 38 percent in 2017, up from 31 percent a decade earlier.
Foreign airlines such as Emirates and Hong Kong’s Cathay Pacific Airways have reached the limit of flights into India allowed under bilateral agreements and New Delhi has not extended additional rights, creating an opening for domestic carriers to grow, said Binit Somaia, director for South Asia at CAPA.
“Demand is there, income levels are rising and people want to travel internationally,” he said.
Jet Airways is considering launching new flights from Mumbai to Sydney, two sources with knowledge of the matter said, while Vistara is planning to order six Boeing Co. 787 aircraft and will expand its narrowbody fleet of Airbus A320neos as it starts international flights, sources have said.
A Jet Airways spokesman said the airline “continuously reviews its fleet and network plan ... to realize greater synergy with its business strategy.”
In the domestic market, which provides crucial connections for international flights, airlines have been jockeying for position at a time when one-time leader Air India has been losing market share to rivals with far lower costs, such as IndiGo.
The Indian government last month failed to attract a single bidder by the deadline for its 76 percent stake sale in the loss-making national carrier.
Revenue per available seat kilometer, a measure combining airfares and seats filled, has been falling at Indian airlines due to stiff competition at a time when the oil price has risen nearly 50 percent in the last year.
IndiGo last month reported a steep fall in quarterly profit due to higher fuel prices and continued pressure on yields, a proxy for airfares.
IndiGo has lifted the proportion of its capacity dedicated to international flights to 15 percent, from 11 percent, in the last year and is seeking regulatory approvals needed to operate long-haul flights, Rahul Bhatia, the company’s chairman, said during an analyst call.
SpiceJet is the only listed Indian airline to post a profit for the last 13 quarters consecutively.
Analysts say it has achieved this by maximizing its aircraft utilization and also flying less competitive routes where it can have a better control over fares, helping protect yields.
Even so, it plans to expand its international flights as it starts taking delivery of its Boeing 737 MAX aircraft from August. The planes, which have a range of six hours and can reach destinations such as Singapore, Hong Kong and Bangkok, will mainly be deployed on international routes.
Infrastructure constraints at major Indian airports like Mumbai and Delhi, where daytime slots are hard to get, also make going international a better option as airlines can utilize night-time slots, a SpiceJet official said.
“International is the only way out,” the official said.
India airlines spread their wings to escape airfare war at home
India airlines spread their wings to escape airfare war at home
- India is one of the cheapest domestic airline markets in the world, with an average fare of 13 cents per kilometer flown
- The Indian government last month failed to attract a single bidder by the deadline for its 76 percent stake sale in the loss-making national carrier Air India
Saudi Arabia sets global benchmark in AI modernization
- Executives hail the Kingdom’s robust infrastructure and strategic workforce programs
RIYADH: Saudi Arabia is emerging as a global leader in artificial intelligence, according to executives from OpenText, one of the world’s largest enterprise information management companies.
With 22 years of international AI experience, Harald Adams, OpenText’s senior vice president of sales for international markets, said the Kingdom’s modernization efforts are now setting a global standard.
“From my perspective, Saudi Arabia is not only leading the modernization towards artificial intelligence in the Middle East, I think it is even not leading it only in the MENA region. I think it is leading it globally,” Adams told Arab News.
In an interview, Adams and George Schembri, vice president and general manager for the Middle East at OpenText, discussed the Kingdom’s significant investments in AI during the inauguration of OpenText’s new regional headquarters in Riyadh.
“So for us (OpenText), from our perspective, it was a strategic decision to move our MENA headquarters to Saudi Arabia because we believe that we will see here a lot of innovation coming out of the country, we can replicate not only to the MENA region, maybe even further to the global level,” Adams said.
The new headquarters, located in the King Abdullah Financial District, will serve as a central hub for OpenText customers and partners across the Middle East. Its opening reflects a broader trend of tech giants relocating to Riyadh, signaling the Kingdom’s rise as a hub for global AI innovation.
Adams attributed Saudi Arabia’s lead in AI modernization to a combination of substantial financial backing, a unified national strategy, and a remarkable pace of execution.
“I mean, a couple of things, because the ingredients in Saudi Arabia are of course, quite interesting. On the one hand side, Saudi Arabia has deep pockets and great ambitions. And they are, I mean, and they are executing fast, yeah,” he said.
“So from that perspective, at the moment, what we see is that there are, especially on the government side, I can’t see any other government organizations globally moving faster into that direction than it is happening in Saudi Arabia. Not in the region, not even on a global level, they are leading the game,” he underlined.
Schembri added, “Saudi’s AI vision is one of the most ambitious in the world, and AI on a national scale is not good without trusted, secured, and governed, and this is where OpenText helps to enable the Saudi organizations to be able to deliver on the 2030 Vision.”
“The Kingdom’s focus on AI and digital transformation creates a powerful opportunity for organizations to unlock value from their information,” Schembri stated.
“With OpenText on the ground in Riyadh, our customers gain direct access to trusted global expertise combined with local insight — enabling them to manage information securely, scale AI with confidence, and compete on a global stage,” he added.
DID YOU KNOW?
• Saudi Arabia ranks 5th globally and 1st in the region for AI growth under the 2025 Global AI Index.
• The Kingdom is also 3rd globally in advanced AI model development, trailing only the US and China.
• AI is projected to contribute $235.2 billion — or 12.4 percent — to Saudi Arabia’s GDP by 2030.
The inauguration of OpenText’s new regional headquarters was attended by Canada’s Minister of International Trade and Economic Development, Maninder Sidhu, and Jean-Philippe Linteau, Canada’s ambassador to Saudi Arabia.
Sidhu emphasized the alignment of Saudi Vision 2030 with Canada’s economic and innovation goals.
“His Highness (Crown Prince Mohammed bin Salman) and Vision 2030, there is a lot of alignment with Canada, as you know, with the economic collaboration, with his vision around mining, around education, tourism, healthcare, you look at AI and tech, there’s a lot of alignment here at OpenText Grand opening their regional headquarters,” Sidhu told Arab News.
Saudi Arabia’s AI ambitions are projected to contribute $235.2 billion — or 12.4 percent — to its GDP by 2030, according to PwC. The Saudi Data and AI Authority, established by a royal decree in 2019, drives the Kingdom’s national data and AI strategy.
One flagship initiative, Humain, chaired by Crown Prince Mohammed bin Salman, was launched in May 2025 under the Public Investment Fund. It aims to build a full AI stack — from data centers and cloud infrastructure to models and applications — positioning Saudi Arabia as a globally competitive AI hub. The project plans to establish a data center capacity of 1.8 GW by 2030 and 100 GW of AI compute capacity by 2026.
Saudi Arabia is also expanding international partnerships. In May 2025, Humain signed a $5 billion agreement with Amazon Web Services to accelerate AI adoption domestically and globally, focusing on infrastructure, services, and talent development.
The Kingdom ranked fifth globally and first in the Arab region for AI sector growth under the 2025 Global AI Index, and third worldwide in advanced AI model development, behind only the US and China, according to the Stanford University AI Index 2025.
Education is another pillar of Saudi AI strategy. Starting in the 2025-26 academic year, AI will be taught as a core subject across all public school grades, reaching roughly 6.7 million students. The curriculum will cover algorithmic thinking, data literacy, and AI ethics.
OpenText executives emphasized their commitment to supporting Vision 2030 and the national AI strategy through workforce development.
“OpenText has put a lot of investment in the Kingdom, right. We brought cloud to the Kingdom, we’ve opened our headquarters in the Kingdom, we’ve basically hiring Saudis in the Kingdom, We basically building, if you like, an ecosystem to support the Kingdom. And on top of that, what we’re doing is we’re putting a plan together, if you like, a program to look at how we can educate, if you like, the students at universities,” Schembri said.
“So this is something that we are looking into, we are basically investigating and to see how we can support the Saudi nationals when they come into the workplace. And I’m really excited. I have Harry who is, our leadership who’s supporting this program.”
“It’s something that we are putting together. It’ll take some effort. So it’s still in play because we want to make sure what we put it basically delivers on what we're trying to achieve based on the vision of Saudi,” he added.
“The younger generation is sooner or later either working for us or maybe for a partner or for maybe for a customer. So that’s why we are to 100 percent committed to enable all of that,” Adams said.
