The Indian government’s plan to revise air service agreement with UAE will constrain growth of Indian carriers and could lead to an aeropolitical dispute, aviation consultancy CAPA said today.
India-West Asia segment accounted for half of India’s international air traffic in pre-Covid times. UAE is the largest market within West Asia, with around 60 per cent of traffic flow to and from the region.
India has separate air service agreements with Dubai, Abu Dhabi, Ras Al Khaimah and Sharjah. A media report today said the civil aviation ministry is planning to merge it into a single agreement and cap the number of seats available to Indian and UAE carriers. This would lead to a reduction of flights being offered by UAE-based airlines and would increase fares, the report said. A decision to revise the agreement has to be mutually agreed upon by both parties.
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