In a surprising development, India has put forth an unprecedented demand, seeking four seats for its carriers in exchange for every additional seat it permits Dubai-based airlines to operate in the country. This unconventional approach diverges from the typical bilateral process observed in international aviation trade.
According to sources, India aims to secure a more favorable position for its airlines on international routes. The bilateral air service agreement between the United Arab Emirates (UAE) and India, inked in January 2014, currently allows a combined total of 66,000 seats per week between Dubai and 15 Indian cities. Both Indian and UAE airlines have fully utilized this quota, prompting the UAE to request an increase of 50,000 seats for Dubai.
The demand stems from a disparity in the utilization of flight allocations. Indian airlines predominantly offer point-to-point services to Dubai, while UAE-based carriers leverage their allocations for Sixth Freedom traffic to lucrative destinations in Europe and North America. Sixth Freedom traffic refers to passengers traveling between countries via intermediate airports.
Highlighting the fiscal year 2019-20 trends, it was revealed that a significant portion of Indian passengers traveling to Europe and North America used West Asian hubs like Dubai, Abu Dhabi, and Doha on foreign airlines. Notably, Indian carriers faced a lack of state funding during the Covid crisis, unlike UAE airlines that benefited from substantial government support.
The Indian government, under Prime Minister Narendra Modi’s leadership, aims to level the playing field for Indian carriers on medium- and long-haul routes. Air India, supporting this move, looks to expand its business on long-haul routes using wide-body aircraft.
However, critics, including Emirates and Turkish Airlines, argue that these protectionist measures may harm consumers. Emirates President Tim Clark warned of potential losses for Indian citizens and carriers amounting to $800-900 million annually if capacity expansion doesn’t occur.
Simultaneously, the Indian government is developing a national policy to transform its airports into major international hubs, aiming for seamless connectivity across the South Asian region. This policy, awaiting cabinet approval, focuses on streamlining security and immigration processes, allocating international flying rights, and enhancing infrastructure.
In the dynamic landscape of international aviation negotiations, India’s bold move seeks to redefine the balance of airline operations, sparking both support and criticism from various quarters.
