UAE carriers on Tuesday called on Indian authorities to open up more capacity to them and warned their growth in the country was being held back.
Adel Ali, the group chief executive of Air Arabia, said that the Sharjah-based low-cost carrier had experienced “stagnation” in India, having exhausted its allocation of seats.
“I believe the easy answer is open it up and it’s good for everyone,” he said, speaking at the Capa India Aviation Summit in Mumbai. “All our flights are full and for four years we have had zero growth [in India]. It’s bad for the travelling public, bad for the airline, and I suspect bad for the airports as well as the industry a whole.”
Air Arabia flies to 13 cities in India.
“We are just hoping that as things go on the authorities be kind to us and give us a few more seats,” Mr Ali said.
The budget airline flydubai’s expansion ambitions for India are also hampered because of such restrictions.
“If we do get a chance for more capacity, we are always ready to have it,” said Pran S Dasan, the country head, India, Nepal, and Sri Lanka, for flydubai. The airline is launching flights to Chennai in April and adding another service to Kochi, which he said “closes the recent increase in the bilateral [rights]”, in a market which has enormous potential.
“The reality of it is that India should open up and it’s not only to Emirates, it’s to everyone,” said Essa Sulaiman Ahmad, the vice president, India and Nepal, for Emirates Airline.
The comments come as Indian airlines face strong financial headwinds.
Most carriers in India posted losses last year because of high costs including taxes, airport charges and fuel, while intense competition among airlines in India has led to price wars.
The launch of Vistara, a joint venture between Singapore Airlines and Tata, added a third full service carrier to the Indian market, alongside Jet Airways and Air India.
“We don’t see a market for three full service carriers,” said Kapil Kaul, the chief executive, south Asia, of Capa - Centre for Aviation.
More low carriers are also planned for the market.
“The cost of operating in India is extremely expensive,” said Cramer Ball, the chief executive of Jet Airways, in which Etihad Airways owns a 24 per cent stake. “There needs to be some logic to the airfares because airlines around the world operate on extremely thin margins and we need to be sustainable. The only way that Indian aviation can grow is by being sustainable. It’s not good to have a scenario where you have airlines coming and airlines going.”
Profitability was attainable, however, he said.
“The Etihad partnership offers huge benefits for us,” he said. “It gives us an incredible opportunity to drive traffic into and out of India.”
Mr Kaul added that the “5/20 rule” – a requirement that Indian airlines should have been operating for five years and have a fleet of least 20 planes before they can fly abroad – had to be scrapped to allow newer carriers to expand their networks.
“We have already an energy dependence on the Middle East,” said Mr Kaul. “As a country’s strategy we can’t have connectivity dependence on the Middle East.
“We must … allow Indian carriers to develop international networks. But you have to open up excess. You will have to open excess to Middle East carriers. The question is are you only going to open for Middle East carriers?”
Mr Ali suggested that Air Arabia would be willing to consider opportunities when asked whether the company would look at buying a stake in an Indian airline.
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