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Corporate Feb 11, 2013

Emirates Air may be unintentional beneficiary of Etihad-Jet deal

By Sindhu Bhattacharya

Dubai: Emirates Airline may land more traffic rights to India when the governments of the UAE and India begin fresh talks for increasing bilateral air traffic rights in May this year.

The talks come amid reports that another UAE-based airline, Etihad Airways, is finalising a deal where it will pick up 24 percent stake in India's Jet Airways.

Through this deal, Etihad is obviously keen to gain greater access to the Indian aviation market, where bilateral rights have been frozen for the last five years.

But the Etihad-Jet deal may unintentionally help Emirates too since it has also been seeking much greater access to Indian aviation market for years.

Speaking at the launch of a new concourse dedicated to the Airbus 380 superjumbo aircraft at Dubai International Airport, Emirates' President Tim Clark made it clear that Emirates wanted far more access to India than it was allowed at present.

AFP

AFP

"As of now, the number of seats (we can offer in India per week) and flights are capped. That is regrettable. Emirates can offer Indians connectivity to many points which are right now not available from India. We are asking for number of seats to be doubled and access to at least five or six more ports of call from India."

As of now, the airline is permitted 54,200 seats a week through 185 flights from 10 Indian cities and has not been allowed to increase this number for the last five years.

Emirates is the largest international airline carrying Indians overseas and has often been roundly criticised by Indian airlines for taking away Indian passengers which would have otherwise been flying an Indian airline.

From what Clark said, it is obvious that Emirates would be happy to offer more than a lakh seats per week from at least 15-16 Indian cities.

But why does Emirates want more traffic from India?

The logic is simple. India is one of the few aviation markets in the world which is underserved and has a vast growth potential in terms of air traffic.

Besides, as pointed out by Will Lofberg, Emirates' Senior Manager (Public Environment Affairs) some months back, 11 percent of Emirates' total global network capacity is deployed in India and "with no increase in entitlements since 2008 and high seat factors (84%), carriage growth has been marginal in 2011-12."

When asked Tim Clark if reopening of bilateral talks between India and the UAE will help Emirates, Clark said "any bilateral talks will include everyone (from UAE), not any one single airline".

To a question on why Emirates has not followed the Etihad route of acquisition to gain more access to India, Clark said Emirates had much going on with its fleet expansion programme and there was no plan to look at acquisitions in India.

He was also quoted as saying in the Gulf News newspaper that he was not worried about a potential tie-up between Etihad and Jet Airways.

"I am more threatened by the fact that we have not got more seats. They are already full and we need some more," he said.

Emirates expects revenue for the fiscal year ending 2012-13 to grow between 18 percent and 20 percent and expects profits to rise over the previous year, he said, without giving details.

Not just increasing seats and flights, Emirates has also been fighting a battle over the A380 superjumbo and the Indian government's reticence to allow the world's largest passenger carrier to operate from India.

Other airlines like Lufthansa AG have also sought permission for A380 operations but India has denied all such requests because of Indian carriers' concerns on how these large aircraft will corner a large chunk of the traffic, making their own operations unviable. An A380 can seat about 490 people.

Emirates Airline, the largest foreign carrier operating in India, has built the world's biggest Airbus 380 facility at Dubai which can park twenty of these superjumbos at one go. Perhaps when the bilateral talks begin in May again, the Indian Government will allow the superjumbos to land here.

(Disclosure: Travel for this report was sponsored by Emirates Airline)

by Sindhu Bhattacharya

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