New aviation study urges doubling of seat capacity between India and UAE to curb soaring airfares and unlock economic benefits
A new report has strongly advocated for a liberalised Open Skies Agreement between India and the UAE, highlighting the immense savings and travel benefits it could offer Indian passengers. Titled “Combined Skies: Unlocking the Benefits of UAE-India Aviation Liberalisation for Indian Travellers”, the study underscores that doubling flight capacity could help Indian consumers save over $1.05 billion in the next five years, reported gulfnews.com.
UAE-India aviation liberalisation could reshape regional travel and drive trade growth
Jointly released by the Observer Research Foundation and the UAE Embassy in India, the report outlines how easing restrictions on seat entitlements and allowing more flights between the two countries could dramatically lower fares, especially on underserved Tier-2 city routes.
Currently, seat caps on Dubai (66,000) and Abu Dhabi (50,000) have remained unchanged since 2015. These limitations have contributed to peak season airfare surges of up to 100%, pricing many travelers out of last-minute bookings. According to the study, even a 1% increase in passenger volume correlates with a 0.2% decrease in average fares.
UAE Ambassador to India Abdulnasser Jamal Alshaali emphasized the opportunity for deeper cooperation:
“Liberalising air service agreements could significantly boost Indian consumer surplus and bilateral trade. More connectivity will drive tourism and economic activity.”
Gradual liberalisation and infrastructure upgrades key to sustainable aviation growth
The report recommends a phased increase of 5% annually in bilateral seat capacity, generating $152 million in consumer surplus by 2028. A bolder approach—doubling capacity in five years—could yield over $1.05 billion in economic benefits.
However, despite the benefits and the success of the Comprehensive Economic Partnership Agreement (CEPA) that has already spurred trade, India remains cautious. Challenges such as financial fragility of Indian airlines, ongoing infrastructure development, and concerns over foreign carriers dominating traffic have held back further liberalisation.
Indian airlines like Air India, which recently ordered over 1,000 aircraft, fear their return on investment may be affected if too many bilateral rights are granted to UAE carriers.
“If others get more access, we might struggle to fill our planes,” Air India CEO Campbell Wilson said last year.
Strategic recommendations to unlock aviation boom
The report calls for:
- Doubling bilateral flight capacity over five years
- Targeted UAE airline access to Tier-2 Indian cities
- Investment in Indian airports to develop international hubs
- Joint training programs and collaboration on sustainable aviation fuels and carbon-neutral operations
Passenger traffic between India and the UAE hit 19 million in 2023, making up 30% of India’s international air travel. Yet UAE carriers like Emirates are now eyeing other markets due to prolonged seat restrictions.
At a global aviation event earlier this year, Emirates President Tim Clark said the lack of Indian access has reduced the country’s strategic relevance:
“We’ve been waiting since 2015. India became less important to us. That’s a loss—for India.”
With demand climbing, experts believe both nations are on the brink of an aviation boom, if they act decisively and collaboratively.
