India, Abu Dhabi to hold aviation talks in May: Ajit Singh

Civil aviation minister Ajit Singh on Tuesday said India would be opening up bilateral talks with Abu Dhabi this summer itself.

“We will be opening up bilateral talks with Abu Dhabi to increase seats this May, as by that time, both sides (India and UAE) will be exhausting their bilateral. Recently, we granted bilaterals to Indian carriers. Hence, we are also nearing full utilisation from the Indian side,” Singh told Business Standard.

Singh’s statement comes even as Naresh Goyal’s Jet Airways and Abu Dhabi-based Etihad are in talks to seal a deal for potential investment by Etihad in Jet.

Abu Dhabi has already utilised about 85 per cent of bilaterals from its side.

Apart from that, there would be no restrictions put on Jet Airways confining the city pairs or flights between India and Abu Dhabi. “Jet Airways is an Indian carrier. It can fly from any place in India to Abu Dhabi. We cannot control the city pairs or restrict its number of flights,” said Singh.

Experts said that both these moves in combination would help Etihad use Abu Dhabi as a base to fly Indians to destinations like the USA and Europe. Except for Gulf Air, all West Asian carriers have been focusing more on flying Indian traffic to destinations beyond West Asian hubs rather than point-to-point connectivity.

Aviation ministry officials, however, are concerned about the impact of the deal on Air India. In December 2012, Rohit Nandan, Air India chairman and managing director, had written to the secretary of civil aviation, K N Srivastava.

Air India had expressed concern that allowing investments by foreign airlines would hurt the interests of domestic airlines and prevent Indian airports from developing into international hubs. It added Jet’s flights to Abu Dhabi could be used to carry passengers from India headed for the US and Europe, two government officials said on condition of anonymity.

However, Singh rebuffed Air India’s concerns on the Jet-Etihad deal. “The decision to allow foreign direct investment (FDI) in aviation has been taken in the overall interest of the sector and not for a particular airline. So, there is no reason for any airline to complain about it now,” he said, adding that it would lead to growth in the sector and management expertise. “Once the skies are open, airlines should be ready to face competition,” Singh added.

Currently, Jet Airways flies from two points in India to Abu Dhabi and Etihad flies out from 10 points in India to Abu Dhabi.

Etihad has a minuscule market share compared to other big Gulf carriers such as Emirates and Qatar, which rule the West Asian market. It has a fleet of 70 aircraft, which is nearly a third of Emirates and half of Qatar. In India, too, with less than 2 per cent of the international market, it is a minor player compared to Emirates (over 13 per cent share) and Qatar (over five5 per cent). Etihad has 52 weekly flights to and from India, which is way below Emirates (185 flights) and Qatar (95 flights).

Etihad can feed in passengers seamlessly from Abu Dhabi across the country by using Jet Airways’ wide coverage of over 53 cities in India. Similarly, Jet could bring in passengers from Indian cities to Abu Dhabi, from where they could travel to any destination in West Asia and Africa, where Etihad has excellent connectivity.

Jet Airways can also leverage Etihad’s strong presence in Europe by bringing in Indian passengers through Abu Dhabi.

Jet currently operates only to Brussels, Milan and London in Europe on its own and connects 14 cities through code-share agreements with Brussels Airlines and Thalys. On the other hand, Etihad has a huge network in Europe. It directly flies to over 17 destinations and through its elaborate code-share agreements with around 13 airlines, offers seamless connectivity to over 88 cities.