Thursday, December 02, 2021

Turbulence ahead for US-bound Indian carriers

By EMN Updated: Feb 11, 2014 11:31 pm

Rohit Bansal

[dropcap]F[/dropcap]or those who don’t like point-to-point flights to the US, the choice of a transit airport has hinged on the price of the ticket and the time we have to kill doing a beer and duty-free. So, Frankfurt, London Heathrow, Paris Charles de Gaulle or Amsterdam Schiphol it has been, before the Finns began to hard sell Helsinki in recent years via “higher-order” temptations like a smaller carbon footprint!
Challenging the all-European jostle for the business potential of Indian travellers have been Dubai, Doha and Abu Dhabi. The useful three-way, dog-fight of Arab egos has been spoiling us with aircraft and lounges that feel plusher each year, along with walk-in visas, meet and greet speedy clearance services like Marhaba and deals like free hotel stay and limousine rides in the city.But from end-January there’s been more to Abu Dhabi or Dubai than all its rivals.
Transit from there and you can be done and over with immigration, and customs clearance of your suitcase at UAE itself. So, after crossing the Atlantic via Abu Dhabi you can breeze out of O’Hare or JFK as easily (or at least hope to!) as an American passport holder on a domestic flight!
If that’s cute, nicer still is that the idea is anchored on us, South Asians. As far as India is concerned, only 4 percent of the market of four million, two-way air seats each year to the US (estimate by aviation think tank Centre for Aviation — CAPA) goes via the Middle East.
Sheikh Khalifa bin Zayed Al Nahyan, the ruler of the UAE, now ailing, wanted more. So, after millions of dirhams worth of consummate advocacy on Capitol Hill, Abu Dhabi is now only the 15th airport to get pre-immigration, “city pair” status to the US — the first addition to a list of ultra-special relationships that had stopped growing since the 1980s.
For the record, the first time that US customs and immigration was allowed outside of the US was in Toronto, Canada, in 1952. And the request came from American Airlines just so that pile-ups were avoided at US airports.
Since then, almost all airports in Canada, two in Ireland, and others in the Caribbean, have been accorded the same privilege. Emirates, in recent years, has been wooing Indian passengers to the US via Dubai and then Dublin, where similar US customs and immigration facilities are available — but that makes it two stop-overs.
The advantage with Abu Dhabi is obvious enough. Imitation being a pithy evidence of flattery: Competitor Dubai and its resident airline, Emirates, want to get similar status as of yesterday! But Abu Dhabi and the UAE’s “national” airline Etihad it is for now.
Three points need underscoring in the deal clinched amid stiff opposition from US pilots and the odd American carrier.
First, the ruler of Abu Dhabi has bankrolled the set-up infrastructure and 80-85 percent of the $5-million that US customs will need annually to maintain their shop in his kingdom.
Next, and this flows into the Sheikh’s mission to make Etihad a global carrier, the US market is one of the cornerstones of his vision to de-risk his kingdom from oil revenues. For the US, this is being marketed as a case for enhanced security and deeper checks.
The taste of the pudding now lies in how many millions the UAE can lure to the Abu Dhabi airport — many, in fact, weaned from neighbouring Doha in Qatar and even Dubai, a part of the seven member-emirates comprising the kingdom.
But the most relevant clincher is what UAE negotiators and Naresh Goyal, the non-resident founder-chairman of Jet Airways, secured last year from Civil Aviation Minister Ajit Singh. They rode on the fact that rival Emirates had already got huge increases in its entitlements of air seats from Singh’s predecessor, Praful Patel.
Hence, the Etihad-Jet combine argued successfully, UAE deserved a four-fold increase in air seats it can pick from India in the next three years and a generous addition to the list of Indian airports that Etihad could fly in and out. Add the Sheikh’s equity position being built into Jet, India’s largest private carrier, and we have a perfect recipe for delivering hundreds of thousands of Indian passengers into Abu Dhabi’s ambitions.
Ironically, after the US Federal Aviation Authority downgraded India’s aviation, the new regulations will mean a reversal for Jet and help the Sheikh. Jet can’t add any more seats to the US till the downgrade is reversed. The US part of its revenues will grow as a feeder to Etihad! The losers will be Air India and all other carriers competing for the two-way aggregate of four million seats between India and the US.

The writer is co-founder and chief executive of India Strategy Group, Hammurabi and Solomon Consulting. The views expressed are personal. Tweets @therohitbansal

By EMN Updated: Feb 11, 2014 11:31:34 pm