The Indian government has rejected a bid by the United Arab Emirates (UAE) to expand the reach of its airlines into India after the aviation minister said the Narendra Modi administration was not looking to increase a cap on the number of seats that foreign airlines can put on sale.
At present, Dubai-based airlines are restricted to 66,000 seats per week between a slew of Indian cities and Dubai. That cap has already been reached and, as a result, Emirates and flydubai cannot realise their ambitions of expanding into a slew of smaller Indian destinations.
The UAE had been lobbying the Indian government for a massive increase in capacity of up to 50,000 seats per week, but government minister Jyotiraditya Scindia told Reuters on Tuesday that “at this point, we’re not looking at increasing it”.
The decision will impact several other countries that have also been angling for an increase in flying rights to India. Airline chiefs from Turkish Airlines and Kuwait’s Jazeera Airlines have publicly called for an increase in traffic rights, while Vietnam and Indonesia are also said to be looking for greater access to India.
It had been suggested that the Indian government was looking to secure more flying rights for its airlines in return for permitting foreign expansion, but the aviation ministry is calling on Indian-based airlines to start deploying larger aircraft on capacity-constrained routes.
India’s burgeoning aviation market is seen as a ripe market for expansion, and demand is set to soar over the next decade with the country’s growing and increasingly affluent population.
For now, however, the Indian government appears to be trying to cultivate the ability of its homegrown carriers to take advantage of these capacity constraints. This strategy could benefit the recently privatised Air India as it seeks to rebuild its brand transform the business.
