UAE, India to renegotiate air services agreement


UAE, India to renegotiate air services agreement
The UAE and India share an important strategic relationship in the field of civil aviation.

New Delhi - UAE follows open-skies policy and has never refused requests by Indian carriers to expand operations in the Emirates

By Wam

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Published: Sat 15 Jun 2019, 8:35 PM

Last updated: Sat 15 Jun 2019, 10:51 PM

UAE Ambassador to India Dr Ahmed Abdulrahman Al Banna met Indian Minister for Civil Aviation Hardeep Singh Puri and discussed pressing issues related to cooperation between the two countries.
This was the first face-to-face interaction from the UAE side with a member of Prime Minister Narendra Modi's Council of Ministers since India's new government was sworn in on May 30. The ambassador briefed the minister on the status of a bilateral air service agreement and reiterated a request by the UAE's civil aviation authorities on the urgent need to start negotiations on revising the existing agreement since full capacity has been reached under the present pact.
Dr Al Banna told the Emirates News Agency (Wam) that Puri was 'very positive' in his response to issues raised by the UAE during the discussions. The minister stressed that the UAE and India shared an important strategic relationship.
Talks on the renegotiation air service agreement are now expected to begin in two to three months. Dr Al Banna told Puri that the UAE followed an open-skies policy and has never refused requests by Indian carriers to expand their operations in the Emirates. He said the current conditions in the civil aviation market called for an increase in per capacity.
At present, there are 1,068 flights permitted per week between the UAE and India in both directions. UAE airlines operate just over 400 of these flights and Indian carriers operate over 500 flights. Around 138,000 seats per week are sold by UAE carriers.
Dr Al Banna said UAE carriers are keen to expand their operations to more Tier-2 and Tier-3 Indian cities. There is also scope for more cargo flights between the UAE and India with an increase in demand for such traffic.
Earlier last week, Puri said airlines from the Gulf and other international carriers should be given the foreign traffic rights for Jet Airways, India's major private airline which shut down recently. "I believe that India should not be restrictive in terms of number of flights and so on, because if you have the capacity domestically, utilise it, otherwise don't deprive ourselves of the economic opportunity. Because, I think if you have more players, prices come down," he explained.
Travellers on India-Gulf routes are facing crippling price hikes following the collapse of Jet Airways and the closure of Pakistan's air space to flights originating in India following recent discord between the two countries.
Aircraft flying from airports like Delhi to Gulf countries now have to take a longer route to India's western region like Mumbai or Ahmadabad and then fly over the sea to destinations in the Gulf.
Earlier they used to overfly Pakistan, which reduced flying time by more than one hour and saved costly fuel compared to the current route. This applies to reverse traffic from the Gulf to India too.
Jet Airways had a high volume of traffic to major airports in Gulf countries. No Indian domestic carrier has so far been able to fill the gap caused by the shortage of these seats which used to be in high demand.
Puri has set up a committee to distribute the foreign traffic rights of the defunct Jet Airways among various airlines. India's domestic carriers are vying for these rights, but since they have a capacity problem, Gulf airlines may be allotted these rights to ease the woes of passengers.
Meanwhile, the Centre for Asia Pacific Aviation (Capa) has forecast profitability outlook for India's aviation sector of $500 million to $700 million in the financial year 2020. Before the closure of Jet Airways, Capa had predicted a consolidated loss of $550-$700 million for this sector.
Jet's closure leaves a notable gap in the international market," the forecast said. Jet Airways accounted for 13.8 per cent of India's domestic air traffic and 12.3 per cent of international seats.
"The above profitability projections are assuming oil at $70-$75 per barrel and the US dollar trading at Rs70 to Rs72, and are subject to airlines maintaining pricing discipline," CAPA said.

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