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Business News/ Companies / News/  Emirates to tap India traffic to feed global network
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Emirates to tap India traffic to feed global network

Airline plans a 52% increase in the number of weekly seats, may tie up with Indian carriers flying to UAE

An Emirates aircraft taxiing on the runway ahead of take off in New Delhi. The airline contributed $596 million to the Indian economy in fiscal 2011, according to a study. Photo: Ramesh Pathania/Mint (Ramesh Pathania/Mint)Premium
An Emirates aircraft taxiing on the runway ahead of take off in New Delhi. The airline contributed $596 million to the Indian economy in fiscal 2011, according to a study. Photo: Ramesh Pathania/Mint

(Ramesh Pathania/Mint)

Dubai’s Emirates Airline is firming plans to spread its wings in India, posing a threat to both domestic and global airlines that fly within and into the country.

Emirates, which began its India operations in 1985 and connects 10 destinations in India to its global network with 185 weekly flights, is planning a 52% increase in the number of weekly seats on the India sector, Amber Dubey, partner and head of aviation at consulting firm KPMG, wrote in a report this month.

Emirates did not offer any comments for the story.

Consulting firm Centre for Asia Pacific Aviation, or Capa, said Emirates will be more competitive in India after it expands further into the North American markets from Dubai, even as it continues to lead international traffic growth from India.

The airline contributed $596 million to the Indian economy in fiscal 2011, according to a study commissioned by Emirates and the National Council of Applied Economic Research (NCAER) and published in early September. That year, it directly employed 1,045 Indians (slightly fewer than GoAir that employed 1500) and brought in 529,928 foreign tourists to the country.

A senior domestic airline executive, requesting anonymity, said Emirates has exhausted the bilateral capacity available under the India-United Arab Emirates (UAE) air services agreement, and is looking at further liberalization.

“The government had given more flying rights to foreign carriers before Indian carriers matured to fly overseas. West Asian carriers got all these flying rights cheap. Emirates is shouting about its achievements in the Indian economy through Indian agencies to secure more rights," he said, referring to the NCAER-Emirates study.

Not all subscribe to this view.

“Emirates is a very well-managed airline with a coherent business and development strategy. They have developed progressively over a more than 25-year period," said John Strickland, an air transport consultant with 30 years experience in the airline industry and founder of UK-based firm JLS Consulting.

“Their geographic position in Dubai combined with a fleet of modern long-range aircraft and a high-quality product have resulted in them establishing a leading market position. Operating conditions in Dubai have allowed the airline to grow without government interference and without the shackles of a high-cost operating environment. This is in stark contrast to the situation which has prevailed in India," Strickland said.

Two senior domestic airline executives, also speaking on condition of anonymity, said air traffic in India is a critical component for Emirates’ business strategy. “Since capacity has been exhausted currently, it is quite possible for Emirates to leverage any Indian carrier with flights to Dubai to start feeding traffic for beyond flights. Also, there is no guarantee that India will not open for capacity to Dubai," one of them said.

“In reality, the UAE carriers are the ones providing the family reunion links for Indian families working and studying abroad. Without them, Indian travel would be restricted and prices increase substantially," said Neil Hansford, chairman at consulting firm Strategic Aviation Solutions of Australia. “They also provide significant air cargo links so necessary for Indian growth."

Kapil Kaul, chief executive officer (South Asia) at Capa, however, said globally airlines are influencing governments to stop allowing more bilateral access to foreign carriers.

“Emirates’ growth in future is critically dependent on how it overcomes ‘market access’ challenges. There is growing evidence that Emirates will be constrained by stricter bilateral access globally. There will be continuing opposition to Emirates’ growth globally as well as in India," he said.

Kaul added that globally airlines are beginning to counter Emirates by strengthening their alliances in the carrier’s key markets and forging strategic alliances with other West Asian carriers—especially Qatar Airways and Etihad Airways.

India, too, is on their radar. Lufthansa German Airlines signed a strategic alliance with Jet Airways (India) Ltd that will allow them to sell seats on the other’s network, according to Dubey of KPMG. Qatar Airways, Etihad, Singapore Airlines and AirAsia have also indicated they plan to expand in India, he said in his report.

Meanwhile, Jet Airways, which flies to London, West Asia and the US among other nations, is working on joining Star Alliance, a global grouping of airlines. Rival alliance Oneworld and SkyTeam are also scouting for partners in India.

International carriers flying out of India are focusing on enhancing customer experience to counter competition. British Airways’ cabin crew gets updates on the airline’s customers such as on their previous travel arrangements to be able to offer personalized service.

Stephen King, general manager, Virgin Atlantic (India), said his airline offers Indian food onboard, shows Hindi movies and allows passengers to carry more baggage than in other airlines.

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Updated: 25 Sep 2012, 12:47 PM IST
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