Air India's rise could impact three Gulf hubs, says Saudia Airlines

Air India (AI)'s rise could be at the expense of three "super-connector" hubs — Doha in Qatar, and Dubai and Abu Dhabi in the UAE — as the Indian passenger would any day prefer direct flights of their national airline that is providing excellent on-time service, Arved von zur Muehlen, Chief Commercial Officer of Saudia airline, said on Thursday.

A significant portion — over 70 per cent — of passengers flying on Emirates, Etihad and Qatar Airways flights connected to India utilized the airlines' hubs in Dubai, Abu Dhabi and Doha as transit points for travel between India and third countries in February this year, according to aviation analytics firm Cirium's data reviewed by Business Standard.

In an interview to the newspaper on the sidelines of CAPA India Aviation Summit 2024, Muehlen said Saudia should not be classified along with the aforementioned carriers as more than 90 per cent of its traffic to and from India is "point-to-point". "Only about 6-7 per cent of our passenger traffic to and from India uses Jeddah and Riyadh to transit. We have a very strong local demand...We don't see ourselves as a Gulf airline, we see ourselves as a Saudi Arabian airline," he noted.

The Jeddah-based airline currently operates more than 100 weekly flights to six cities in India. "India is among the top five international markets for us," he mentioned.

Calling AI a "sleeping giant", Muehlen said: "They have a legacy. They have the hearts of the Indian population. If they get it right, it would be more at the expense of the super-connectors because why should Indians fly via any hub when they have a direct offering from their national airline?"

He stated that if AI develops a good product and its on-time performance remains as excellent, the Indian customer will choose the airline over any other hub. "All this hub traffic is there because of the weak traffic of the national airline (AI)," he pointed out.

AI has stridently been opposing any increase in bilateral rights to these three "super-connector" hubs. Its CEO and MD had on Wednesday said that if the Indian government decides to increase bilateral rights to these three hubs, it would be as good as pulling the rug from under AI's feet as it has ordered 470 planes with the belief that it could use them viably to offer direct flights on long-haul and ultra-long-haul routes.

On IndiGo's decision to order widebody planes and introduce business class on its flights, Muehlen said it is interesting that the airline is now going from its low-cost model to a more hybrid model. "The fact that they are going into long-haul, I think it is because they see the current weakness of Air India," he added.

Saudia was in a similar position to that of Air India as it too was a "sleeping giant" that is now becoming stronger, he mentioned. He said Saudia does not want additional bilateral rights from India as it has not completely used the previously allocated quota. Therefore, Saudia can increase flights to India easily, at least for the next two years, he added.

For an airline to operate international flights from one country to another, both sides must negotiate and sign a bilateral agreement. This agreement sets the number of flights or seats that are permitted to operate per week between the two countries.