India to increase Qatar’s entitlement of airline seats

NEW DELHI, India – India is set to increase Qatar’s entitlement of airline seats under their bilateral traffic rights, a move that could help the Gulf nation develop Doha as a major regional hub for westbound traffic from India.

“Qatar would be the next country with whom we will revise the bilateral air service agreement,” a senior official of the civil aviation ministry told ET.

“We are just negotiating the final number for the enhancement in weekly seats, and it should be done soon.” The official did not give a timeline for the pact.

Qatar has sought to enhance its weekly quota of seats under the pact to 72,600 from the current 24,800, which was nearly exhausted. Its national airline, Qatar Airways, is the fifth largest carrier of India’s international traffic, with nearly 4% share of the 45 million passengers travelling to and from India in 2012-13, according to data from Centre for Asia Pacific Aviation.

“The demand for increase in seats with Qatar has mainly been from their side, as Qatar Airways has nearly exhausted its current entitlement, while Indian carriers only use around 10,000 weekly seats, so we will have to see what kind of an increase is actually required,” the official said.

If Qatar’s demand is accepted, it will place Doha ahead of both Abu Dhabi and Dubai in terms of seat capacity. As per an amendment of bilateral traffic rights carried out earlier, Abu Dhabi’s weekly seat capacity is set to touch 50,000 by 2015. Similarly, Dubai enjoys 54,000 seats per week, making Emirates the second largest carrier of India’s international traffic. Emirates, however, has completely exhausted its bilateral entitlements.

Separately, according to another official, the ministries of external affairs and petroleum and natural gas are likely to begin negotiations with their Qatari counterparts to get a discount on the supply of Liquefied Natural Gas (LNG) from the Gulf country. The two negotiations are not linked, the official added.

The last time India enhanced bilateral seat entitlements with Qatar in 2009, the Gulf nation had promised investments in education, hydrocarbons and petroleum.

The volume of bilateral trade between Qatar and India has grown from $1.2 billion in 2005 to $16 billion in 2013. However, it remains skewed in favour of Qatar, as India imports a significant amount of its energy requirements from the Gulf country. India is witnessing more requests for enhancement of seat entitlements after it relaxed rules in September 2012 and allowed foreign airlines to make equity investments in Indian carriers.

According to one of the officials quoted earlier, China, Dubai and Bahrain, too, have sought an increase in bilateral seat entitlements. “The decisions on those will be taken after we finalise the agreement with Qatar,” the official said.

“China has only recently sent in a request, so we are yet to open negotiations with them.”

Immediately after the Jet-Etihad deal was announced in April, India enhanced bilateral seat entitlements with Abu Dhabi.

Singapore, too, got a 10% increase in bilateral seat entitlement, following which Singapore Airlines announced a joint venture with Tata Sons to start a new full-service airline in the country.

While Qatar Airways has denied being interested in investing in Indian carriers, it has been in negotiations to find a code-share partner, and has offered to sponsor national carrier Air India’s entry into the Oneworld Alliance.

The airline declined comment on whether there could be a change in its stance on investing in India if the bilateral seat entitlements are enhanced.

Qatar Airways, launched in 1997, is the third largest carrier by available seat kilometres in the Gulf region behind Emirates and Saudi Arabia. About 15% of its currentcapacity is deployed in the south Asian region in and around India.