India has demanded a ratio of four seats for its airlines for each additional seat granted to Dubai-based carriers. This stands out as international aviation trade typically involves a bilateral process exchange rights are reciprocated.

As per the bilateral air service agreement inked between the UAE and India in January 2014, airlines of both nations are allowed to operate 66,000 seats per week between Dubai and 15 Indian cities. Both Indian and the UAE airlines such as Emirates and Flydubai have exhausted this quota. This means there is no scope for any increase in flights.

Now, the UAE has requested the Ministry of Civil Aviation to consider raising the seat limit for Dubai by an additional 50,000. UAE based airlines utilise these allocations for Sixth Freedom traffic to Europe and North America, where ticket values are higher. In contrast, airlines from India primarily focus on providing point-to-point services to Dubai. Hence there is need for a more balanced policy that favours Indian airlines. As per sources, the government’s aim is to establish a more advantageous position for Indian airlines on international routes.

Sixth Freedom traffic pertains to the carriage of traffic between two foreign states via the state in which the airline is registered. For example, during the fiscal year FY19-FY20, 69 per cent of Indian travelers heading to Europe and North America used West Asian hubs like Dubai, Abu Dhabi, and Doha, opting for foreign airlines.
The move has been supported by Air India as the Tata group airline seeks to expand business on long-haul routes through wide body aircraft. Air India took delivery of its first Airbus A350 on December 23, as it embarks on an expansion and turnaround programme.

Air India and IndiGo have placed orders for over 1,000 aircraft, but only 70 of them are for wide-body planes capable of flying routes longer than seven hours.
“It’s very difficult for us to fly an aircraft to North America if there’s a surplus of capacity that allows people to travel out by some other airline, and so, too much just leaks out,” said Campbell Wilson, chief executive, Air India, recently. “Incubate your local market, because that’s fundamentally the most beneficial thing you can do for the economy.”
Overseas airlines such as Emirates and Turkish Airlines have said this move is protectionist and will hurt consumers. About 65 per cent of international flights operated by Indian carriers come to Dubai. If you don’t expand capacity, Indians will be the losers and the carriers will lose $800-900 million worth of income every year,” Tim Clark, president, Emirates, said.

The government is also framing a national policy to transform its airports into major international hubs that will offer single-point international connectivity to the entire South Asian region. The policy, which will need cabinet approval, aims to frame laws for easing security and immigration bottlenecks at airports, besides allocation of international flying rights and building necessary infrastructure. The strategy is aimed at ensuring that airports such as New Delhi’s can become transit hubs competing with Dubai and Singapore’s Changi Airport.
Staff Report