Indigo: All airlines are not on board on ‘protection’

India’s policy to freeze flying rights to Middle East nations has divided the aviation industry, with Air India CEO Campbell Wilson calling for limiting market access for foreign carriers.However, Wilson’s call for more protectionism has not found support among other Indian carriers such as IndiGo and new entrants Akasa, which are looking to launch new flights to the Middle East. Liberalisation of bilateral rights is likely to emerge as a flash point in the industry as a new government takes charge, say experts.

Wilson said Air India is investing in ordering aircraft, and opening up the Indian market to foreign airlines will put its investment at risk.

“Indian carriers have recently ordered more than 1,000 aircraft. We have an appetite for more. We are committing to that on the basis that there would be an economic return to that investment, which, if you add it all, is well over $100 billion. If the rug is pulled out from under us, and if we can’t fly those aircraft, we will not take those planes,” Wilson said at the CAPA India Aviation Summit.

His comments came days after Emirates president Tim Clark said the Indian government’s move to restrict foreign carriers will leave Indian air passengers with fewer choices on international routes. “I can tell that it will not work in the long run. It will be detrimental to India’s own economy,” Clark said in response to a query from ET.

The UAE has sought 50,000 more seats per week to India. The last increase in flying rights to Dubai came in 2014 which allowed Emirates to operate 66,284 seats on India routes. However, since then there has been an
exponential rise in traffic between India and Dubai and carriers can’t add more flights as they have exhausted their quota.

“They are feeding their own economy and their own hub, not India’s. So, when we are talking about liberalisation of bilateral rights, we need to talk about who is opening what to whom,” Wilson said.

“Our government is smart enough to figure out what needs to be done to protect India’s future in a manner which doesn’t saddle Indians with higher fares. If we don’t open up Dubai for next one year, the fares will rise exponentially,” Vinay Dube, CEO of Akasa, told ET.

IndiGo CEO Pieter Elbers said there can’t be a blanket opening or closing of bilateral rights and it needs to be decided on a case basis. “Such discussions need a holistic tailor-made approach.”