India to open up bilateral talks with Abu Dhabi this summer: Ajit Singh

Bilateral talks to help Etihad use Abu Dhabi as base, fly combined feed from Jet, own network to far off destinations

Just a week before when the deal between Naresh Goyal promoted Jet Airways and Abu Dhabi based Etihad is about to be concluded, civil aviation minister, Ajit Singh said that India will be opening up bilateral talks with Abu Dhabi this summer only.

 

Singh told Business Standard, “We will be opening up bilateral talks with Abu Dhabi to increase seats this May, as by that time both Indian and other side will be exhausting their bilateral. Recently, we granted bilaterals to Indian carriers, so we are also nearing full utilization from Indian side.” Abu Dhabi has already utilized more than 85% 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 the number of flights,” said Singh.

 

Experts believe that both these moves in combination would help Etihad use Abu Dhabi as base and fly the combined feed from Jet’s and its own network to far off destinations like USA and Europe etc. Except for Gulf Air, all other West Asia carriers have been focusing more on flying Indian traffic to destinations beyond the middle-east hubs rather than point to point connectivity.

 

Curiously, the minister’s views are in variance with that of the officials in his ministry. According to sources, there has been a buzz among ministry officials that Air India’s interests should be taken into consideration, even if the Jet-Etihad deal goes through.

 

In December, 2012, Rohit Nandan, Air India Chairman and Managing Director had written a letter to Secretary of civil aviation, K.N. Srivastava. Air India had expressed concerns that allowing investments by foreign airlines would hurt the interests of domestic airlines and prevent Indian airports from developing into international hubs. It added that 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 Jet-Etihad deal. "The decision to allow foreign direct investment (FDI) in aviation has been taken in 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 will lead to betterment and 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 and Etihad flies out from 10 points in India to Abu Dhabi. 

 

Etihad has 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% of the international market, it is a minor player compared to Emirates (over 13% share) and Qatar (over 5%). 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.