India-UAE Open Skies Deal Essential for Lower Airfares, Report Urges

UAE-India Open Skies Agreement Could Lower Airfares and Boost Trade

A new report has renewed efforts to liberalize air travel between the UAE and India, suggesting that more flying access may reduce ticket prices and benefit travellers. While UAE airlines such as Emirates and flydubai have long lobbied for an Open Skies Agreement, seat capacity has remained consistent since 2014-15, despite increased demand.

The study, “Combined Skies: Unlocking the Benefits of UAE-India Air Transport Liberalization for Indian Travelers,” points out that even a 1% increase in passenger numbers can reduce fares by 0.2%. During peak seasons, ticket prices can quadruple, making last-minute travel expensive. According to the research, while major routes such as Delhi-Dubai may see little impact, flights from smaller Indian cities could see considerable price decreases.

Economic Benefits and India’s Hesitation

Abdulnasser Jamal Alshaali, UAE Ambassador to India, indicated that extending flight access might result in over $1 billion in consumer savings and increased bilateral trade. A 5% yearly increase in seat capacity might save travelers $152 million by 2028, while doubling capacity in five years could result in $1.05 billion in benefits.

However, India has been cautious, prioritizing domestic airlines facing financial difficulties. While UAE carriers have built global networks, Indian airlines are still developing an international footprint.
Air India CEO Campbell Wilson has cautioned that increased foreign airline access will have an impact on Indian carriers, who have invested more than $100 billion in new aircraft.

The Way Forward

The research recommends incremental capacity expansion while reinforcing Indian airports as international hubs.It also promotes joint projects, including aviation education and sustainable fuel development.

With 19 million passengers traveling between India and the UAE in 2023, or approximately 30% of India’s international traffic, the demand is evident. However, Emirates Airline President Tim Clark expressed dissatisfaction with India’s restrictions, noting, “For 10 years, we couldn’t expand, making India less significant for us.”

India today faces a critical decision: open its skies to unleash economic potential, or risk losing out to rival markets.