India-UAE airfares could drop if capacity expands

Airfares between India and the UAE are expected to become cheaper if air travel capacity doubles over the next five years.

A 20 percent drop in ticket prices could save Indian consumers $1 billion, CNBC-TV18, an Indian financial news channel, reported, citing UAE ambassador to India Abdulnasser Alshaali.

He said the UAE has proposed a 4:1 air connectivity deal with India, which allows Indian carriers to operate four additional flights or increase seat capacity for every additional flight or seat capacity granted to UAE carriers.

This is, however, a temporary measure, he said, adding it could be revised to 3:1, 2:1 or 1:1, as Indian carriers expand operations.

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Alshaali said that the UAE is looking at new cooperation in defence with India, as well as expanding strategic petroleum reserves and developing new sectors such as genome sequencing and data centres.

In January Dr Sahitya Chaturvedi, secretary general of the Indian Business and Professional Council, told AGBI that the UAE and India plan to extend their 10-year trade deal to eight new sectors to expand their annual bilateral trade beyond $100 billion.