Dubai: With demand starting to skyrocket, ticket rates between India and the UAE could remain defiantly high through the Expo months, according to travel industry sources. The only option to stabilize rates at current levels would be for India to allow more flights by UAE airlines to operate in the sector.
Apart from the Expo, what will keep demand at a constant peak would be the upcoming T20 cricket World Cup as well as the late December/early January end-of-season bounce. The ongoing IPL T20 games have already provided a taster of what’s in store for travel interest from India.
“Flight capacity has doubled since travel re-opened for residents in August and fares are also up 25-30 per cent – this is likely to continue until the end of Expo in March next,” said a spokesperson for a leading travel agency in Dubai.
Another travel agent said demand for seats and visa application requests from India are “too high”.
New Delhi is the third-busiest route from Dubai with 63 flights per week, right behind Riyadh and Bahrain, according to Flightradar24. Delhi and Mumbai are among the busiest routes from Abu Dhabi with 24 flights per week and 14 flights per week, respectively.
India's aviation regulator recently extended the ban on scheduled international commercial flights until October 31, citing COVID-19 concerns. While Indian authorities have put a ban on international scheduled flights, there are certain flights specifically approved by them.
India has signed air bubble agreements with several countries, including UAE. This means Indian and UAE carriers can operate flights between the two categories for certain categories of passengers.
More seats an option
There could be further flight capacity increases after UAE and India finalise a highly-anticipated trade deal within the coming weeks. “There’s a possibility of increasing flights under the air bubble [treaty], particularly (because of) Dubai Expo,” said Piyush Goyal, India’s Commerce Minister, during media briefing in Dubai last week.
“There are certain issues in the long run, which still need to be sorted out between the two countries on expanding bilateral air transport elements, which require the civil aviation ministries of both governments to engage more deeply.”
The government level talks come as Indians are expected to make up the largest visitor group at the six-month Expo. Between January and July, 422,000 Indians visited Dubai and constituted 15 per cent of the 2.85 million visitors to the city during this period.
A seat from New Delhi to Dubai will cost between Dh1,500 to Dh2,000, while those from Mumbai can cost up to Dh2,700. In August, Economy Class tickets from New Delhi or Mumbai were limping at Dh900 to Dh1,500.
Flights from the south Indian cities of Thiruvananthapuram and Kochi cost between Dh1, 500 to Dh2,000. In August, these were running at Dh1,000 or thereabouts. Flights from Dubai to Indian cities have also experienced a price surge – New Delhi and Mumbai cost between Dh500-Dh1,000 now and a sharp gain on the Dh200-Dh300 from July and early August.
With the addition of more flights, fares may normalize, but a true return to normalcy will not take place until next year.
A bubble issue
Over the course of the pandemic, India has been operating flights to other countries under air bubble agreements. The bilateral deals, which place limits on flight frequencies and capacity, are considered to be a move to protect India’s airlines.
The ‘bubbles’ also add an extra layer of bureaucracy by requiring airlines to get their schedules approved by India’s aviation regulator on a monthly or bi-monthly basis. Often, airlines end up having to cancel or re-schedule flights when they don’t receive the DGCA’s (Directorate General of Civil Aviation) green light.
“It impacts largely the Gulf airlines because they rely primarily on ‘Sixth Freedom’ traffic,” said Vinamra Longani, Head of Operations for Sarin & Co, an Indian law firm specializing in aircraft leasing and finance. (Sixth Freedom rights relate to airports operating as hubs for onward travel.)
Focus on inward arrivals
Emirates airline and Qatar Airways have traditionally relied on these long-haul routes to drive their top-line numbers, but that may soon change now. Both UAE and Qatar are attempting to transform themselves into tourist hotspots and, by doing so, generate more inbound traffic.
“That's the whole idea, (with) the Expo and sporting events - the idea is to increase tourism move away from relying on sixth freedom traffic,” said Longani.
With or without India, bookings to UAE are on the rise and the country’s airlines will be among the biggest beneficiaries. “Forward bookings are looking very encouraging - we are responding to increased demand through the ramp up of operations across the network,” said an Emirates airline spokesperson.
“We expect the Expo will provide an even bigger boost to visitor numbers, and it is definitely the highlight for Dubai for the remainder of 2021 until April 2022.”
Emirates currently operates direct flights from 71 of the 191 countries that have confirmed participation in the Expo. Etihad Airways has seen a spike in demand since Abu Dhabi opened up for tourism earlier this month.
“Expo 2020 is a huge opportunity for tourism growth across the UAE, and we’re already seeing strong interest in Etihad’s Expo 2020 complementary ticket offer,” said Martin Drew, Senior Vice-President, Sales and Cargo, Etihad Aviation Group.