All India-Abu Dhabi traffic rights exhausted, time for aviation authorities to explore expansion of bilaterals, says Etihad CEO

The aviation landscape between India and Abu Dhabi has reached a pivotal moment. According to Etihad Airways Group CEO Antonoaldo Neves, the existing bilateral air traffic rights between India and Abu Dhabi have been fully exhausted by both sides. This development signals a critical need for aviation authorities from India and the United Arab Emirates to revisit and expand the current air service agreement (ASA) to accommodate increasing passenger and cargo demand. The CEO’s statement reflects broader trends in global air connectivity and the rapid growth of travel between India and the Gulf region.

Background: The India-Abu Dhabi Aviation Corridor

India and Abu Dhabi share a robust aviation corridor, driven by strong business ties, tourism, and the extensive Indian diaspora residing in the UAE. Etihad Airways, the national airline of Abu Dhabi, has been a key player in connecting the two regions, operating frequent flights from Abu Dhabi to multiple Indian cities. Indian carriers such as IndiGo and Akasa Air also serve this lucrative route, facilitating the movement of millions of passengers annually.

The bilateral air service agreement between India and the UAE governs the number of flights and seats airlines from each country can operate on this route. It sets limits on frequencies and capacities to balance commercial interests and national carrier protections. However, these limits are not static; they evolve as market demands grow and economic relationships deepen.

Traffic Rights Fully Utilized

Etihad CEO Antonoaldo Neves recently pointed out that both Indian and UAE carriers have fully utilized their allotted flying rights under the existing bilateral agreement. Indian airlines, including the country’s largest low-cost carrier IndiGo and the newer Akasa Air, exhausted their shares about six months ago. Etihad itself reached its capacity limit a year prior, highlighting the sustained growth in air travel demand on this corridor.

Neves emphasized that this saturation is a natural outcome of expanding travel and trade ties between the two regions. Passenger volumes, cargo shipments, and connectivity requirements have all increased significantly, driven by growing economic activity, tourism, and the large expatriate population. The inability to add more flights or increase capacity under current bilateral terms limits further growth opportunities.

The Need for Expansion and Bilateral Revision

Given the full utilization of existing rights, the Etihad CEO called for urgent discussions between the Indian and UAE aviation authorities to renegotiate and expand the air service agreement. He stressed that now is the ideal time to explore new bilateral arrangements that reflect current market realities and future growth prospects.

Expanding the bilateral rights would enable both Indian and UAE airlines to add more flights, increase seat capacity, and open new routes. This would help meet pent-up demand from business travelers, tourists, and the diaspora community. Enhanced connectivity could also foster stronger economic ties, promote tourism, and facilitate cargo movement, benefiting industries on both sides.

Etihad’s own expansion in India illustrates this potential. The airline currently operates 176 weekly flights to 11 Indian cities, including major hubs such as Delhi, Mumbai, Chennai, Kolkata, and Bangalore. The recent launch of new routes like Jaipur and increased frequencies to Ahmedabad and Bengaluru demonstrate Etihad’s confidence in the Indian market. India ranks among Etihad’s top three markets worldwide, underscoring its strategic importance.

Indian Aviation Industry’s Cautious Approach

While Etihad’s leadership advocates for bilateral expansion, the Indian aviation sector holds a more cautious view. Several Indian airline executives have expressed concerns about opening up additional bilateral rights to Gulf carriers, fearing it could disrupt the competitive balance.

Air India CEO Campbell Wilson highlighted that Indian carriers have recently placed massive aircraft orders worth over $100 billion. He cautioned that indiscriminately granting more bilateral rights to Gulf airlines might impact Indian carriers’ ability to fill seats on these new planes, affecting their financial viability. Wilson’s viewpoint reflects a broader worry that an oversupply of capacity from foreign airlines could erode market share for Indian carriers.

Ajay Singh, Chairman and Managing Director of SpiceJet, also voiced reservations about expanding bilateral rights. Singh advocated for prioritizing the development of Indian airports as international aviation hubs, which would strengthen domestic carriers’ competitiveness. Instead of quickly opening bilateral routes, Singh suggested a focus on infrastructure and market consolidation.

Meanwhile, carriers like IndiGo and Akasa Air recommend a more holistic assessment before any decision is made to increase bilateral rights. They emphasize that growth must be sustainable and consider market dynamics, passenger demand, and the interests of all stakeholders.

Balancing Growth and Industry Interests

The debate between expanding bilateral traffic rights and protecting domestic airline interests is not unique to India and the UAE. Globally, many countries grapple with how to strike the right balance between fostering international air connectivity and ensuring the health of their home carriers.

In this context, a negotiated, phased approach to revising the India-UAE air service agreement could be a pragmatic solution. It would allow gradual capacity increases tied to demonstrated market demand while providing safeguards for Indian airlines to adapt and compete.

Moreover, expanding beyond just Abu Dhabi to include more Gulf airports and new cities in India could diversify options and spread growth benefits. Enhanced cargo rights and code-share agreements could further improve network efficiencies.

Future Outlook: A New Chapter in India-UAE Aviation Ties

The exhaustion of India-Abu Dhabi traffic rights marks a turning point in the aviation relationship between the two regions. It highlights the extraordinary growth potential but also the challenges of managing bilateral agreements in a rapidly evolving market.

The call by Etihad’s CEO for revisiting and expanding bilateral air rights is timely and necessary. For India, which is one of the fastest-growing aviation markets globally, unlocking more air connectivity options with Gulf carriers can spur economic growth, tourism, and cultural exchange.

However, this expansion must be calibrated with Indian carriers’ capacity and market development goals. Indian authorities will need to carefully navigate stakeholder interests, market realities, and geopolitical considerations.

In the coming months, dialogues between Indian and UAE aviation regulators and airlines will be critical. A refreshed, mutually beneficial bilateral framework can ensure that air travel between India and Abu Dhabi—and by extension the UAE—continues to flourish, supporting the broader economic partnership between the two nations.