Emirates and the India Problem

With the untimely demise of Jet Airways, there has been a flurry of activity in Indian aviation. While the revival of Jet Airways appears difficult, its competitors are leaving no stone unturned. They are furiously taking multiple steps to shore up their position. This includes

• Leasing aircraft that once belonged to Jet Airways
• Launching new international routes especially to Middle East and South East Asia
• Grabbing prime time slots in key airports of India

Unfortunately, Emirates – one of the largest international airlines out of India – has not been part of this hectic activity. Not because it does not want to, but because it cannot. In this post, I will explain why. And it leaves Emirates very disappointed.

Indian Regulations Leave no Room for Emirates to Expand

India follows a reciprocal arrangement with international carriers. On a case-to-case basis, Government of India negotiates a treaty with a foreign country and sets a maximum limit on the ‘seats per week’. This governs the maximum number of flight foreign airline(s) can operate into India.

The number agreed between UAE and India is approximately 130,000. There are 4 airlines to share this bounty – Emirates, Etihad, flydubai and Air Arabia. As you can see from the table below, there is literally no room for expansion.

Destinations	Emirates	flydubai	Etihad	Air Arabia	Total
Ahmedabad	9x weekly	2x weekly	12x weekly	7x weekly	30x weekly
Bengaluru	20x weekly		14x weekly	7x weekly	41x weekly
Chennai	21x weekly	3x weekly	14x weekly	7x weekly	45x weekly
Delhi	28x weekly	5x weekly	21x weekly	14x weekly	68x weekly
Goa				7x weekly	7x weekly
Hyderabad	21x weekly	4x weekly	14x weekly	7x weekly	46x weekly
Jaipur				7x weekly	7x weekly
Kochi	14x weekly	4x weekly	21x weekly	14x weekly	53x weekly
Kolkata	11x weekly		7x weekly		18x weekly
Mumbai	35x weekly	5x weekly	28x weekly	14x weekly	82x weekly
Thiruvanthapuram	11x weekly		7x weekly	14x weekly	32x weekly
Kozhikode		3x weekly	14x weekly	7x weekly	24x weekly
Total Flights	170x weekly	26x weekly	152x weekly	105x weekly	453x weekly
Total Seats	73100	5200	33440	17010	128750

In other words, the UAE-India market is saturated for international carriers.

Why is the Indian Market so Important for Emirates

India is one of the largest, most under-penetrated and fastest growing aviation markets in the world. This is something you know already.

However, the more interesting aspect is the severe lack of direct flights options when travelling from India. Air India is the only full service Indian carrier which flies internationally. Indigo has been expanding its international footprint but cannot travel beyond Middle East and South East Asia for logistic reasons.

Air India travels to quite a few destinations internationally. There are two issues though. First, I have seen that people either love or hate Air India. Many from the latter category claim that they would never fly Air India either because of a bad experience previously or concerns over aircraft maintenance.

Second, and more importantly, most of the international operations of Air India are from its hub in Delhi. Now, India is a pretty big country. You cannot take a 2-3 hour train from another city to Delhi. You would have to fly to Delhi.

For example, if you are travelling from Mumbai to Rome, this is how Air India and Emirates compare

The total journey is shorter if you fly Emirates (11h 45m) vs if you fly Air India (12h 35m). Do you understand where I am getting to? All things remaining same, Mumbai-Dubai-Rome makes more sense than Mumbai-Delhi-Rome. The same is true for other large India cities like Bangalore, Chennai, Kolkata etc.

To rephrase this, India is the holy grail for Emirates. Not just for traffic into Dubai, but also all over the world. Till Jet Airways remains bankrupt and Indigo does not fly longer routes, Emirates will likely remain the leader in international traffic out of India.

Tim Clarke on India

Let us revisit the previous point on saturation. With the demise of Jet Airways, Emirates clearly saw an opportunity. This included increasing frequencies in cities where it flies and also to add more cities in India. There are several Tier II and Tier III cities in India which can support international traffic and have not been served yet.

However, till the cap of ~130,000 seats remain, there is nothing that can be done. UAE government is cognizant of this. There are high-level talks going on with the Government of India to increase the aforementioned cap.

As far as Emirates is concerned, its President, Tim Clarke said this in an interview.

“The bilateral (air traffic) rights between India and Dubai is the biggest single problem. Now, the elections are over and the Modi government is back in power. I am hoping that the talks would (between India and Dubai) reopen. The biggest beneficiaries of the increased capacity (foreign flying rights) have been the Indian carriers. Now, what is stopping them from saying that India could have some more. I don’t know. It does not make any sense to me. Lot of things do not make sense there and that is where we are.”