India and Saudi Arabia have revised air services agreement enabling an increase in flights between the two countries. The weekly seat quota for carriers of two countries has been increased from 28,000 to 50,000 as a part of the MOU signed in Riyadh last week. The increase in seats will take place in a phased manner. In first instalment it will rise to 36,000 and will subsequently increase upon utilisation from both sides, aviation sources aware of the development said.
While India has turned down demands from West Asian states including Qatar and UAE for an increase in seats (last month government said no to UAE proposal for more flights), it made an exception in case of Saudi Arabia. While Indo-Saudi relations are on an upswing with co-operation in various areas, Indian carriers too did not oppose the proposal to hike the quota. This is because of the nature of air traffic between the two countries. There is limited onward traffic over Saudi Arabia. Most of the passenger flow is point-to-point. This is not the case with airports like Abu Dhabi, Dubai, Doha or Muscat which serve as hubs for Indians travelling to Africa, Europe and the US.
The increase in seat entitlement will also help airlines from both countries to grow their traffic and improve loads. Currently, around 30 per cent of passenger traffic between India and Saudi Arabia travel via other Gulf hubs and an increase in seats will help Indian and Saudi airlines to grow their market share on the route.
A civil aviation ministry spokesperson did not respond to an email query on the topic.
Among the Indian carriers Air India, Air India Express, IndiGo and SpiceJet operate flights to Saudi Arabia while Saudi Arabian Airlines and Flynas are two carriers operating into India. Flynas added three routes - Riyadh-Lucknow, Dammam-Lucknow and Riyadh-Kozhikode last month. Around 5 million passengers flew between the two countries in 2018 and the market has not seen growth because of the closure of Jet Airways.
According to sources both Indian and Saudi carriers are currently utilising over 80 per cent of current entitlement of 28,000 seats. SpiceJet will launch Delhi-Riyadh service in the winter schedule. Both SpiceJet and IndiGo plan also to add services to Dammam. Under the agreement, Indian carriers have access to four airports in Saudi Arabia while Saudi carriers are allowed to operate to eight airports in India. Indian carriers have unlimited access to Dammam and the Saudi government has been seeking reciprocal unlimited access for its airlines to one of the Indian airports. The Saudi government has been seeking additional access points in India but the Indian government has not considered these requests.
"Currently the traffic between India and Saudi Arabia is dominated by labourers and pilgrims. However going forward we expect tourists and business travel to increase as Saudi Arabia is making large investments in infrastructure, developing sectors other than oil and encouraging tourism," said Balu Ramachandran, senior vice president, Cleartrip.com.
The seat quota between the two countries was revised from 20,000 to 28,000 in December 2016. However, the revised limit came into effect earlier this year after Indian carriers had utilised 80 per cent of the existing quota. India's civil aviation policy puts riders on increasing seat quota with countries within 5,000 kilometres range. The seat quota with all such countries can be renewed in the usual manner only when Indian carriers utilise 80 per cent of their entitlement.