Airlines

An Afghan Airlift That Makes Money


A SpiceJet plane prepares to land at Chhatrapati Shivaji International Airport in Mumbai on May 23, 2013

Photograph by Dhiraj Singh/Bloomberg

A SpiceJet plane prepares to land at Chhatrapati Shivaji International Airport in Mumbai on May 23, 2013

Bibihaji Zia returned to Kabul in August after knee surgery in New Delhi. She flew on SpiceJet, the only private Indian carrier with direct flights to war-torn Afghanistan. “There are hospitals in Afghanistan, but the quality of medicine is the biggest issue,” says Zia’s son, Sediq. “Getting Indian visas is easy. The alternative, Pakistan, is less secure and less friendly.”

The demand for medical tourism is a rare bright spot for SpiceJet, which is struggling financially. The number of Afghans seeking treatment, up 21 percent last year to more than 32,000, is set to climb further now that Indian Prime Minister Narendra Modi has relaxed visa rules to strengthen ties between the two nations. SpiceJet’s data show it flies about 1,000 Afghan medical tourists and their relatives each month from Kabul to New Delhi, earning the company about 156 million rupees ($2.6 million) a year based on average ticket prices. The carrier says the route is “very positive” when asked about profitability but won’t give details. Mounting costs and competition in India’s skies caused SpiceJet to lose 1.24 billion rupees from April to June, its fourth straight quarterly loss.

Sediq Zia, 24, studies in New Delhi and lives in the city’s Lajpat Nagar neighborhood, a “Little Afghanistan” that draws medical tourists from his country and is dotted with travel agencies bearing signs in Pashto. He says he paid $3,700 for his mother’s knee replacement at Saket City Hospital in India’s capital. The same procedure costs about $19,200 in Singapore and $34,000 in the U.S., according to Patients Beyond Borders. “Demand is quite high for Delhi-Kabul flights,” says Mehtab Singh, a manager at Welcome Travels in Lajpat Nagar. “We book 20 to 25 tickets to Kabul every day during peak season.”

Afghan patients are part of an Indian medical tourism industry that will double in value to $6 billion by 2018, the PHD Chamber of Commerce and Industry estimates. Arrivals in that period will climb from about 230,000 to 400,000. The two-hour, 625-mile trip linking the Indian capital with Kabul can be risky. On July 3 the Taliban attacked the airport in the Afghan capital with rockets while a SpiceJet plane was parked there. The assault damaged three helicopters and a hangar, says Mohammad Yaqub Rassouli, head of Kabul International Airport. SpiceJet, which briefly suspended flights to Kabul after the attack, wasn’t the target and has security steps in place, spokeswoman Sudipta Das said via e-mail.

The airline, India’s second-biggest by market share, is one of four that provide direct service between Kabul and New Delhi. The others are Air India and Kabul-based Kam Air and Safi Airways.

SpiceJet’s Indian network, which provides the bulk of its revenue, has been losing money because of cutthroat pricing in the overcrowded domestic market. The carrier’s debt has erased its net worth; it’s fallen behind on airport fees and has been forced to postpone aircraft deliveries. That’s why the Afghan medical customers are so welcome. The fare on SpiceJet’s Kabul-to-Delhi flight is almost $500 for a round trip—up to three times the price of its hop from Mumbai to Delhi, even though the domestic flight is almost 90 miles longer. “High-risk or war-risk routes are high-yield,” says Mark Martin, chief executive officer of Dubai-based Martin Consulting, which advises airlines on strategy.

India introduced a medical visa for Afghans in 2005, then eased the rules on July 1, allowing Afghans to stay up to two years and exempting medical tourists from some police registration requirements. India issued about 100,000 visas to Afghans in 2013—including more than 32,000 medical permits—up from 85,000 in 2012, says Niteen Yeola, a political officer at the Indian Embassy in Kabul. Raju Vaishya, a senior orthopedics consultant at Indraprastha Apollo Hospital in New Delhi, says he operates on about 600 Afghan patients a year.

SpiceJet says demand for Kabul flights may lead it to increase services from the three a week it currently operates, if slots at airports are available. The alternative for Afghans seeking medical treatment, Pakistan, is less welcoming because of animosity between the governments over cross-border terrorism. “Once I was going home with my girlfriend at 2 a.m. in Delhi, and the cops gave me a lift,” Zia, the student, says. “Can you imagine the same in Pakistan? There, they’d probably shoot me the moment they realize I’m an Afghan.”

The bottom line: More than 32,000 Afghans traveled to India for medical care last year, giving a lift to ailing SpiceJet.

Kotoky is a reporter for Bloomberg News in New Delhi.
Gupta is a reporter for Bloomberg News in Mumbai.

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