Indecision over enhancing Dubai's traffic rights to impact Emirates

Revision of traffic rights with Dubai has generated controversies earlier too

The contentious issue of enhancing traffic rights with Dubai has left the civil aviation ministry divided and a further delay in revision will hurt the Dubai-based Emirates airlines.

Emirates is the largest foreign airline operating in India with a market share of 10.8 per cent in international traffic in the country. It accounts for almost a third of the entire traffic between India and the US and has the largest market share on routes between India-Africa.

In 2016, the Dubai airport alone handled 83 million passengers, out of which over 11 million were from India. Around 60 per cent of passengers between India and Dubai travel to other destinations and delay in enhancing traffic rights will impact Emirates which depends heavily on Indian market to fill up its flights to  Europe, Africa and North America. 

Dubai has requested to add 50,000 seats to its existing quota of 63,000 seats per week in one way.  The Economic Times on Wednesday reported that the civil aviation ministry is divided on the issue of increasing  Dubai's traffic rights.

While civil aviation minister Ashok Gajpathi Raju is said to be in favour of an immediate revision of traffic rights but his deputy, Jayant Sinha, is opposed to the idea and has suggested that the government must formulate a long-term policy on the issue before awarding traffic rights to other countries.

Sinha and civil aviation ministry officials did not respond to text messages seeking a comment. Emirates too declined to comment on the issue.

The issue of seat revision with Dubai has generated controversies earlier too including the denial of slots at the Dubai airport. Moreover, even the Comptroller and Auditor General (CAG) had observed on an earlier occasion that giving away traffic rights would adversely impact Air India.

Other countries too have viewed the revision of Dubai traffic rights unfavourably. In August last year, Qatar civil aviation authority chairman  Abdulla Naseer Turki Al Subaey had, in writing, raised an objection to India's resistance to increasing seat quota with Qatar, while agreeing to enhance the traffic rights of other Gulf countries. Last year, India had increased the traffic rights of Oman and Saudi Arabia. 

“Any revision of traffic rights will widen the gap between Emirates and other airlines,” an executive of a foreign airline remarked. “Bilateral rights are an important asset of any country and should not be given away lightly. The UAE is the only nation that has a separate bilateral for each emirate. It is like India getting separate air traffic quotas for Maharashtra, Karnataka and West Bengal, ” said Devesh Agarwal, editor of aviation blog, Bangalore Aviation.

However, some experts believe that India should liberalise its skies further and allow 100 per cent foreign investment by foreign airlines.

"Bilateral quotas and excessive protectionism is an anachronism in the aviation world. It has definitely not helped India over the last seven decades.  Quotas help perpetuate artificial supply shortages and hence higher airfares. We expect economy fares to rise in excess of Rs 60,000 for a 3-4 hour flight to the Gulf during Eid, Diwali and Christmas.  This is hardly the vision encapsulated in civil aviation policy which focuses on the affordability and connectivity as its cornerstones,” said Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG.