Clearing the skies for UAE carriers
In February, India and Dubai agreed to liberalise their bilateral air services agreement, increasing weekly seat entitlements for each side by 20%. This makes the UAE the largest market for India, far above the UK, Germany, Singapore and Thailand, accordi
Emirates Airlines currently operates to 10 Indian cities, while flyDubai operates to three, with Ahmedabad and Hyderabad common to both carriers’ networks. The additional 11,000 weekly seats would allow Emirates to introduce A-380s on the majority of its five daily services to Mumbai and four daily services to Delhi, currently operated by A330/A340/777 aircraft. Some of the entitlements may also be allocated to flyDubai to open additional points of call in India. The current 55,000 weekly seat entitlements for each side by approximately 20 per cent on a staged basis over the next 13 months.
The first tranche of 5,500 additional seats available from the upcoming summer 2014 schedule would allow Emirates to ramp up to four daily departures from Delhi and/or Mumbai. Permission to operate the A-380 on Indian routes is timely for Emirates, which will face temporary slot constraints at Dubai Airport between May-2014 and July-2014 due to runway upgrades.
India has separate bilaterals with different emirates of the UAE. As a result of the expanded bilateral agreements that India has signed with Dubai and Abu Dhabi over the past 12 months, weekly entitlements for UAE carriers will increase to over 135,000 seats by 2015/16.
Including the points of call available to Indian carriers from which Jet Airways will be able to operate to Abu Dhabi, hubs in the UAE can be fed from 26 points in India. This represents a massive increase from the 10,400 seats available to six cities in 2003/04. And it dwarfs the access offered to any single other country; it is almost as much as all European countries combined, which have just over 160,000 seats available to them.
In addition, the majority of the Indian bilateral entitlements to Abu Dhabi are expected to be utilised by Jet Airways operating a coordinated network and schedule with Etihad. As a result the number of weekly seats feeding hubs in the UAE is likely to be closer to 170,000-175,000.
Indian LCCs are currently averaging load factors in the range of 70-75 per cent on routes to Dubai and are not faced with an urgent need to further expand capacity. And indeed the viability of services from Delhi and Mumbai may come under further pressure as a result of competition from Emirates A380s on these routes.
However, SpiceJet reportedly submitted a plan seeking an additional 12,000 weekly seats to Dubai, 10,000 seats to Abu Dhabi and 22,000-24,000 seats to Doha - although it has yet not fully utilised the seats to Dubai allocated to it previously. The proposed growth in operations to these three points alone is almost three times the size of SpiceJet’s total international seat capacity at present.