Thursday, March 08, 2018

Air Arabia eyes more flights to India, sees strong growth

Mumbai: Sharjah-based budget airline Air Arabia, which has not been able to expand in India due to constrained bilaterals between India and the UAE, says it sees strong demand to deploy more flights between India and its hub at Sharjah. It is hoping there would be an increase in the number of the seats allotted to the no-frills carrier in the near future.

“We always want more capacity and our job is to convey this to the governments. And the governments then meet and decide. We have been requesting the governments for some years now and whenever the decision is made (to increase the number of seats), it will be good,” said Adel Abdullah Ali, group CEO, Air Arabia.

The current stalemate over not allowing more seat allocation to airlines operating between India and the UAE, Ali said, was because airlines in India were not using the entire capacity that was made available. But now, as Indian carriers expand and budget airlines fly more passengers to the UAE, this seat utilisation has reached near-optimum levels with the scope for renegotiating the seat share between the countries.
“Indian carriers are using more seats today and if the governments meet and if they see it is good to increase flights, it will happen,” Ali said, adding that India and the UAE trade ties are on a very strong footing and India is one of the biggest trade partners of UAE, with good air connectivity.

Getting its fair share of seat allotment is tough for a relatively smaller airline like Air Arabia with a fleet size of 50 aircraft, especially when it has to compete with some of the largest fleet airlines globally, like Emirates, Qatar Airways and Etihad, that garner more than 80% of the allotted seats on the route and use wide-body aircraft, unlike Air Arabia which uses single aisle A320s.

Air Arabia currently operates about 113 weekly flights from 13 Indian airports with 85% load factor. It says the Indian market has been performing satisfactorily for the airline, and the Indian business makes money, as all its Indian routes are profitable. Though there has been some yield dilution year-on-year, the airline has been able to sustain profitability of its operations. For the year 2017, the airline posted a combined record profit of $180 million.
08/03/18 Financial Express