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Indian Express
7 days ago
- Business
- Indian Express
All India-Abu Dhabi traffic rights exhausted, time for aviation authorities to explore expansion of bilaterals, says Etihad CEO
The emirate of Abu Dhabi could be the next Gulf territory to approach India seeking an expansion of the bilateral air services agreement as existing traffic rights have been exhausted by Abu Dhabi-based Etihad as well as India's airlines. According to Antonoaldo Neves, the Group Chief Executive Officer of Etihad Aviation Group, it is time for aviation authorities of India and Abu Dhabi to initiate discussions on expanding traffic rights, also called bilaterals in aviation parlance. While almost all major Indian airlines fly to Abu Dhabi and share the 50,000 seats per week per direction of the traffic rights among themselves, Etihad is the only carrier from the emirate and accounts for all the 50,000 seats in Abu Dhabi's quota. Till one-and-half years ago, both Eithad and Indian airlines had room available to add seats on India-Abu Dhabi routes. In fact, Indian carriers were together utilising just about 30 per cent of the seat quota at the time, while Etihad was using around 50 per cent, Neves said. But within the last one year, both sides have fully exhausted their respective traffic rights. Currently, there is no discussion between India and Abu Dhabi on expansion of bilaterals. 'We have about 170 flights per week. About one-and-a-half years ago, we were using only half of the bilaterals, but now we're using all the traffic rights, and India too. IndiGo added a lot (of flights), and Akasa (Air) added some. IndiGo now is actually flying from 13 cities into Abu Dhabi…I think now we have all the conditions for starting a discussion again about traffic rights, because it's going to be good for the Indian carriers as well as us,' Neves said. The exhaustion of India-Abu Dhabi traffic rights comes at a time when another UAE carrier Emirates has been urging India to increase seats under the India-Dubai bilateral air services agreement beyond the limit of around 66,000 seats per week per direction, but the Indian government appears to be unwilling to lend an ear. Unlike air services agreements with most countries, India's bilaterals with the UAE are emirate-specific. The Indian government and major Indian carriers like Air India and IndiGo have ambitions to have more direct international connectivity from India and to turn the country into an international aviation hub. A significant number of passengers flying to far-off destinations from India take connecting flights through major global hubs outside the country, Dubai and Doha for instance. India wants its carriers to ramp up wide-body operations, instead of facilitating foreign airlines, particularly Gulf-based carriers with deep pockets, in ferrying passengers—transfer traffic from India—to Europe and beyond via their large hubs. Put simply, increasing seats under bilateral pacts does not sit well with India's grand aviation ambitions. Neves, however, said that the concern that large Gulf carriers like Etihad are taking away a lot of transfer traffic from India was unfounded, and that airlines price seats on the basis of demand and their network. He said that the demand is significant enough to accommodate transfer traffic as well as point-to-point traffic. 'The discussion that people always bring is this is transfer traffic and that is point-to-point. I could argue differently and I could say that I would love to get the point-to-point (traffic) that IndiGo is getting to Abu Dhabi…The flipside of that equation is, if I'm doing only transfer (traffic), I'm giving to IndiGo all the point-to-point traffic. My point is that the discussion about point-to-point versus transfer is just a silly discussion. We don't price like that, we price to demand,' Neves said. Neves also argued that being restrictive on seat quotas amid growing demand was not in the interest of Indian consumers. 'If you regulate, it's the start of the end. Because if you regulate, you go back to the old days where fares were controlled. India today has 200 million passengers because fares are not controlled anymore, that's the only reason. Every time you try to put artificial controls, the market doesn't grow,' he said. While acknowledging that Etihad and possibly even Indian carriers may not have the aircraft capacity currently to add additional seats between India and Abu Dhabi, Neves said that they will have more aircraft in the coming years, and the time is apt for discussions on bilaterals to start. 'I think it should be done at the right time, at the right pace. My load factor today is 88 per cent. If I get more seats in India today, first, I need to cancel other flights to bring the planes here. I don't want to do that…So, my point is it needs to go step by step, so we're not in a hurry, but I think we need a dialogue… Of course, I understand that nobody wants to give 10 times more seats tomorrow. And that's understandable, but there's got to be a staggered approach that is good for everyone. It's impossible that there is none,' Neves said.
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Business Standard
02-06-2025
- Business
- Business Standard
Debate around bilateral rights 'silly': Etihad CEO Antonoaldo Neves
The ongoing debate on whether bilateral rights between India and Gulf nations should be increased only when there is substantial point-to-point traffic is 'silly,' as demand is so high that it can accommodate everyone, Etihad Aviation Group chief executive officer (CEO) Antonoaldo Neves told Business Standard. He added that each airline's cost and pricing model serves a different customer segment. His comments come a day after Air India CEO and MD Campbell Wilson said that bilateral flying rights should be increased only if there is substantial point-to-point demand. At the core of the debate are concerns from Indian airlines that Gulf carriers carry limited point-to-point traffic between India and West Asia, instead using their hubs in Dubai and Abu Dhabi to predominantly taking passengers onward to Europe and North America. 'The discussion is just silly because in the end, we don't price like that. We price according to demand,' Neves said. He added that Indian carriers — like IndiGo — have some of the lowest unit costs in the world and are able to offer cheaper fares to Abu Dhabi, while Etihad targets a different set of passengers. Neves said talks between India and Abu Dhabi for additional rights have not yet begun but should start soon. 'It is the right time to start the discussions,' he said. He mentioned that the demand for seats on Etihad's India flights are 'very high' but the aircraft supply in itself 'remains constrained' due to supply chain issues. The load factors on Etihad's India flights remain above 90 per cent throughout the year. 'So, what we need is a staggered approach. We need to increase the bilateral rights between the two countries in a staggered manner,' he added. The bilateral air services agreement between India and Abu Dhabi currently allows for 50,000 weekly seats for airlines from each side. Both Indian and Abu Dhabi-based carriers have fully utilized their allocated flying rights. Speaking against allegations that Gulf carriers enjoy an unfair edge, Neves said, 'I believe in trade agreements and traffic right agreements that are balanced so that both sides have the same tools to compete. And they explore the opportunity in a balanced way.' He said Indian airlines are well-positioned to compete. 'Indian carriers' unit cost is better than ours. So, this story that Indian carriers don't have an ability to compete is not of today. It's an old story,' he added. Neves said Etihad could have used the same argument to block expansion. 'Etihad could say it doesn't want any increase in bilateral rights because IndiGo has a much lower unit cost due to low labour costs. But I am not saying that. I am saying that both – Abu Dhabi and India – are pro-market places that encourage competition,' he added. He also questioned claims of protectionism. 'I think there's a lot of discussion about this protectionism, but I don't think it matches the action. Because if the action was protectionism, why did IndiGo just announce a partnership with Air France-KLM? Why is IndiGo not flying all over Europe before they do a partnership with Air France-KLM?'
