Tuesday, August 15, 2017

Gulf flag-carriers see manifold jump in entitlements in 2017

Mumbai: As domestic carriers fail to utilise their bi-laterals, especially to the Gulf airlines eating away 54 per cent volume, foreign flag-carriers have seen manifold jump in their entitlements in 2017, with UAE, Qatar, Oman and Singapore leading the pack.
While domestic carriers’ ownership of international passenger market originating to and fro from the country is a very low 38 per cent, for countries like the Netherlands it’s a high 61 per cent, for China and Britain it is 49 per cent each, says a report by brokerage ICICI Securities.
“The share of the Gulf carriers to and fro from here has jumped from 27 per cent in 2008 to 33 per cent in 2015, while the same for the Southeast Asian airlines jumped over two times from 5.9 per cent in 2008 to 12.3 per cent in 2015,” says the report.
This has, says the report, “domestic airlines enjoy only 38 per cent of the total international segment capacity as measured by available seat kilometres. This is very low compared to other countries like the Netherlands (61 per cent), China and Britain (49 per cent each).” One of the reasons for this lopsided market is the round-tripping of passengers via international hubs of Dubai and Singapore, notes the report, which has been made through utilisation of the sixth freedom of the air and increase in capacity entitlements under bilateral air service agreements.
Gulf carriers enjoy almost 54 per cent of total global air travel destination for the country.
But these countries are not the end-destinations for most passengers but are being used as stop-over hubs to carry passengers for onward destinations in the US, Canada, Europe etc.
“The sixth freedom of the air has to a large extent been responsible for reducing the share of direct long haul flights for domestic carriers from 25 per cent in 2011-12 to 20.5 per cent in 2015-16,” the report says.
The sixth freedom of the air means the right to fly from a foreign country to another while stopping in one’s own country for non-technical reasons.
The sixth freedom of the air means the right to fly from a foreign country to another while stopping in one’s own country for non-technical reasons.
Fifth freedom means the right to fly between two foreign countries on a flight originating or ending in one’s own country, while the fourth freedom means flying from another country to one’s own.
What is more, the percentage of sixth freedom traffic for most Gulf and Southeast Asian airlines is over 50 with Qatar and the UAE having greater than 60 of the total traffic.
“Between 2003 and 2017, the capacity entitlements between Dubai and India have increased manifold. The same for Oman and Qatar jumped 9 and 12 fold, respectively,” notes the report.
While the UAE saw its weekly seats or bi-laterals jumping from 10,400 in 2003 to 66,500 in 2017, for Oman, it soared to 27,400 from 3,800; Qatar to 24,800 from 2,900 and Singapore’s to 26,300 from 1,650, says the report.
15/08/17 India.com