Will India's Government Finally Ease Emirates' Critical Capacity Cap?

Emirates airline is renewing its push for an increase in flight capacity to and from India. The Dubai-based carrier remains optimistic about ongoing government-level discussions. The goal is to ease the long-standing limits on seats it can sell in this key market.

Adnan Kazim, Emirates’ Deputy President and Chief Commercial Officer, spoke on the issue. He made his comments on the sidelines of the World Governments Summit. Kazim confirmed that India remains a priority market for the airline. This is despite the current capacity constraints.

The Bilateral Capacity Crisis

The core issue is the bilateral air services agreement between India and the UAE. This pact sets a cap on the number of weekly seats. It allows approximately 65,000 to 66,000 weekly seats for carriers on each side. This limit has been in place for over a decade, since the last revision in 2014 or 2015.

Demand from Indian travelers has grown significantly since then. Emirates President Tim Clark previously stated the demand-supply mismatch was severe. He estimated the demand was nearly 200,000 seats per week. This is more than two and a half times the current entitlement.

Kazim noted that the airline's seat factors are currently at "turn-away levels." This highlights the severe gap between supply and demand. The capacity limits have forced Emirates to redirect its growth strategy. India has slipped from the airline's top five markets into the top 10.

Optimism and Strategic Focus

Emirates is focused on maximizing performance within the existing framework. The airline is proactively optimizing its schedules and connectivity. This strategy ensures they are ready to scale up quickly. This will happen if additional entitlements are granted.

Kazim expressed optimism about the direction of engagement. He believes enhanced connectivity will come over time. He stressed that capacity progress would unlock wider benefits. This includes advantages for travelers and the broader aviation ecosystem.

• Current Cap: ~65,000 weekly seats per side between India and Dubai.
• Estimated Demand: Close to 200,000 weekly seats, according to Emirates.
• Impact: High airfares and limited availability, especially during peak season.

The Indian Perspective and Industry Impact

The Indian government has historically been cautious about increasing foreign carrier capacity. This is often seen as a measure to protect domestic airlines. Indian carriers like Air India and IndiGo are expanding their international networks. They are making large aircraft orders to offer more direct long-haul flights.

Indian airline leaders have warned against opening the "floodgates to foreign carriers." They argue that Gulf carriers primarily use the capacity for Sixth Freedom traffic. This diverts high-value international traffic away from Indian hubs. However, reports suggest that doubling the capacity could save Indian travelers over $1 billion. This would happen by reducing high airfares caused by scarcity.

Emirates remains open to commercially meaningful collaborations. This includes codeshares and interline agreements with Indian carriers. However, Kazim stated that partnerships alone cannot fully address growth ambitions. They need to be supported by adequate international capacity. Without this, the scope for incremental connectivity remains limited. The UAE has proposed a 4:1 seat ratio to India. This would initially grant four seats to Indian carriers for every one seat to UAE airlines. This proposal aims to address Indian carriers' concerns while increasing overall capacity.

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