India enhances bilateral traffic rights with Abu Dhabi

Govt agrees to expand number of seats available weekly on flights between India and UAE to 50,000

Brushing aside opposition from state-owned Air India, other domestic carriers and private airports, India today enhanced traffic rights for Abu Dhabi to 50,000 seats a week, against the current 13,000 seats. The expansion in bilaterals would virtually put Etihad Airways in the same league as Dubai-based Emirates, which is entitled to about 54,000 seats a week.

Today, the Naresh Goyal-promoted Jet Airways sealed a deal with Abu Dhabi-based Etihad Airways. Under the deal, Etihad would acquire a 24 per cent stake in Jet for Rs 2,054 crore ($379 million).

A press release issued by the civil aviation ministry today said, “After present negotiations, both sides have agreed to allocate an additional entitlement of 36,670 seats per week spread over a period of three years — 11,000 seats per week in 2013, 12,800 seats a week up to the winter schedule for 2014 and 12,870 seats a week up to the winter schedule for 2015.”

Opposition to enhanced bilateral traffic rights wasn’t restricted to aviation circles. In a meeting of an inter-ministerial group, the finance ministry had expressed reservations, saying such a move would take away Indian air traffic and harm not just airports, but also airlines, especially Air India. It added the move would also cannibalise the traffic share of Indian airlines by flying passengers to various parts of the world through its hub airport in Abu Dhabi, as was the case with Emirates.

Last week, at a meeting of the parliamentary standing committee on tourism, transport and culture, headed by Sitaram Yechury, Members of Parliament (MPs) from various political parties voiced concern over Abu Dhabi getting increased access to India through its proposed equity participation with Jet Airways. Trinamool Congress MP Dinesh Trivedi wrote a letter to the prime minister, seeking immediate intervention to suspend talks of increasing bilateral flying rights between India and Abu Dhabi.