CAPA India noted in a presentation at the recent India-Middle East aviation dialogue webinar that international cargo operations have gradually increased in India over the previous decade. An increase in crucial pharmaceutical and perishable cargo due to Covid-19 has provided the industry with a boost, it claimed.
There will be roughly 25m origin-destination (OD) passengers, and close to 8m connecting flights to and from Europe, the Americas, or Africa in the 2020 fiscal year. In 2019, India welcomed roughly 350,000 Middle Eastern nationals. 22 per cent of them were medical tourists, which is a significant number.
India’s foreign traffic is expected to increase by between 50mn and 60mn passengers per year by 2030, compared to the pre-Covid period of time. More than 30 per cent of India’s foreign origin-destination traffic is long-haul, but the country’s airlines are only slated to add about 70 widebody aircraft. These measures would only address 50 per cent of the additional long-haul demand, according to preliminary estimates.
“There are reasons to be bullish about the prospects for Indian airlines to expand and compete more aggressively on international routes. These include, for example, the ongoing privatisation of Air India, the addition of a large fleet of long-range narrow bodies and the possible revival of Jet Airways.
“The impact on competition from Gulf airlines has been a key concern for Indian airlines, but as the market is expected to be very large by the fiscal year 2030, it could accommodate Indian as well as Middle Eastern airlines without strategic conflicts.”
“A win-win outcome is possible. The market will be large enough to enable both Indian and Middle Eastern carriers to co-exist and add value, without strategic conflict.” CAPA noted regarding GCC and India.
“The Covid-19 pandemic has relieved pressure for additional seat entitlements. Now is the time to prepare a long-term strategic framework for market access that balances India’s economic objectives with the aspirations of Indian carriers,” CAPA noted.
As the Indian-Middle Eastern commercial and strategic connection deepens, the aviation relationship has been put on hold. According to the webinar, most GCC markets have used up their bilateral entitlements several years ago.
“The Byzantine approach to bilaterals needs to be broken. Instead, there must be a clear aviation policy and objectives against which business plans of airlines seeking market access can be assessed.” said Abdul Wahab Teffaha, secretary-general, Arab Air Carriers Organisation (AACO), addressing the event.
“Sometimes it is easier for airlines to argue that their competitors are predators than to do the hard work that is required to be competitive themselves,” he stated.
Teffaha urged governments to “not only listen to airlines, but also to consumers and businesses.” Consumer interests should come above national interests, he said.
‘Open Skies’ agreement between India and the UAE, says Air Arabia Group CEO Adel Ali, would be ideal because airlines are operating with more than 95 per cent load factors, resulting in higher costs and passengers compelled to travel through a third point. “Consumers are losing out,” he noted.
Ali said the Air Arabia Group was “unable to expand in India for the last 10 years because of bilateral constraints”. The UAE-based airline, on the other hand, proceeded to expand internationally and seeking new markets.