Mideast Opens a Gulf Between Jet & Other Airlines

Differences have cropped up not only among players in the aviation sector,but also various arms of the government on the issue of quadrupling air capacity between New Delhi and Abu Dhabi over fears that the move will cripple the domestic aviation industry.In the backdrop of an impending deal between Jet Airways and Gulf carrier Etihad,important ministries like finance are opposed to the civil aviation ministrys proposal to increase bilateral flying rights between India and Abu Dhabi by 40,000 seats per week (from 13,300 per week now).Those who support the move are also doing so out of fear that the UAE could otherwise block potential investments into the country.According to government sources,in a meeting of an inter-ministerial group (IMG) on Thursday,the finance ministry opposed increasing the flying rights between India and Abu Dhabi,arguing it would take away Indian air traffic,not only harming airports but also airlines,especially national carrier Air India.The Department of Economic Affairs said at the IMG that on the one hand the government was pumping Rs 30,000 crore into Air India to bail it out,on the other hand how could it organise someone else to come in and take away its traffic, a government source said.The department fears once Etihad buys into Jet Airways,it will cannibalise the traffic share of Indian airlines by flying passengers to various parts of the world through its hub airport in Abu Dhabi,just like Dubaibased Emirates has done.In aviation circles,Emirates has been dubbed as Indias de facto national airline,by virtue of the fact that the Middle-Eastern carrier has a 13% share of the outbound traffic from India.Gulf airlines such as Emirates,Etihad and Qatar,which are gateway carriers,dominate air routes between India and the Middle-East to the extent that 40% of total West-bound Indian traffic is routed through the Gulf.The ministry also pointed out that increasing bilateral rights between India and Abu Dhabi will hamper plans to make Delhi a world-class hub on the lines of Singapores Changi and Dubai airport, the official added.But the ministries of external affairs and commerce supported it,fearing that a lot of investments lined up from Abu Dhabi could be withheld if bilaterals are not granted to the UAE airline,the source said.

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