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In what could prove a jolt for Emirates Airlines and Qatar Airways, the civil aviation ministry has decided to put on hold the grant of additional seats under bilateral air services agreements with West Asian states.
A top ministry source confirmed the government would not enter into any fresh agreement this year. "There is no need now. We could have negotiations after six months. There is no major demand from Indian carriers to urgently revise traffic rights and expand flights to these states. Only the foreign carriers from these states want more. Our interest is to help Indian carriers," the source said.
The decision came even as the government recently enhanced capacity between India and Abu Dhabi by 36,670 seats a week for a staggered three-year period - soon after Abu Dhabi-based Etihad Airways picked a 26 per cent stake in Jet Airways. Analysts say the move is likely to challenge Dubai's pre-eminence as the largest West Asian hub for Indian passengers travelling to the US and Europe.
Some experts say the decision to freeze grant of additional seats might be to help Jet and Etihad get a larger share of the passengers flying from India to West Asia and beyond to the US.
Bilateral air services agreements contain, among other things, capacity entitlements for airlines from both sides - essentially the number of flights airlines from one country can operate to another.
In comparison with Dubai, Sharjah and Qatar, which have demanded 80,000 additional seats a week from India, domestic carriers have sought only around a fourth, around 20,000 additional seats, to these destinations. Besides, unlike their foreign counterparts, Indian carriers have not exhausted their seat capacity limit. So, their additional requirement can be met even under the existing bilateral arrangement.
For instance, Dubai's traffic rights of 54,000 seats a week are fully utilised by Emirates (which has also been pushing for more capacity) and FlyDubai. Emirates flies 185 flights a week to 10 Indian cities and carries about 12 per cent of India's international traffic. In contrast, Indian carriers utilise 36,000 seats on the Dubai route. In the case of Qatar, while it has largely exhausted its quota, Indian carriers flying to the country have been utilising less than 30 per cent of the existing entitlements.
The grant of additional traffic rights to Abu Dhabi in April had raised many eyebrows. A parliamentary standing committee headed by CPI(M) leader Sitaram Yechury demanded the government reconsider the bilateral pact with Abu Dhabi and freeze the seat entitlement to the pre-revised level of 13,000 seats a week. Also, Janata Party chief Subramanian Swamy demanded Prime Minister Manmohan Singh review the decision and threatened to file a public interest suit on the issue.
The Cabinet has yet to give its approval to the revised air services agreement with Abu Dhabi.
