Air India’s Expansion Sparks Concerns Among Middle Eastern Carriers: Saudia’s Chief Commercial Officer Warns of Potential Impact

Feature and Cover Air India's Expansion Sparks Concerns Among Middle Eastern Carriers Saudia's Chief Commercial Officer Warns of Potential Impact

India serves as a significant source of passenger traffic for numerous hub carriers, a fact not lost on industry observers. With Air India currently streamlining its operations and expanding its fleet to provide more direct long-haul services, there’s speculation about its potential impact on Middle Eastern carriers. During the CAPA India Aviation Summit 2024 in New Delhi, Arved von zur Muehlen, Saudia’s Chief Commercial Officer, shared insights on this matter.

Von zur Muehlen remarked that Air India’s recent resurgence and its future growth strategies could pose a challenge to the dominance of the major hub carriers in the Middle East. He highlighted the substantial presence of Emirates, Qatar Airways, and Etihad in India and the broader subcontinent, noting that a significant portion of this traffic comprises transit passengers rather than those flying directly to their destinations. Von zur Muehlen suggested that as Air India expands its nonstop flight offerings to popular global destinations, more Indian travelers may opt for the national carrier instead of taking connecting flights. Referring to Air India as a “sleeping giant,” he emphasized that the current high volume of hub traffic from India is largely due to the relatively weaker position of Air India in the market.

While acknowledging Saudia’s status as a Middle Eastern carrier, von zur Muehlen differentiated it from the other major Middle Eastern carriers by highlighting that over 90% of its traffic to and from India is point-to-point. He indicated that Saudia is not actively seeking additional bilateral rights from India, as it has yet to fully utilize its existing quota.

The desire for increased access to Indian airports among foreign carriers, particularly those from the Middle East, is evident. However, the bilateral agreements governing air traffic rights have not undergone significant revisions in a considerable time, prompting foreign carriers to seek expanded opportunities in the Indian market. In 2022, the UAE proposed adding another 50,000 seats per week between the two countries, which would benefit Dubai-based carriers seeking a greater presence in India. Indian authorities, however, have shown reluctance to revise these agreements, prioritizing the growth and development of domestic carriers to cater to local demand. Air India’s CEO Campbell Wilson supports this stance, emphasizing the importance of nurturing a robust network and fleet.

India’s position on granting additional rights to foreign carriers appears steadfast, with little indication of softening. Even in instances where negotiations are possible, India seeks to ensure mutual benefit. For instance, reports earlier this year suggested that India proposed receiving nine seats for every extra seat offered to Kuwait. The outcome of these negotiations and their implications for the aviation landscape in the coming years remain uncertain.


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