Protect fliers or airlines? India’s dilemma as airfares to Singapore, Gulf soar

Raghav Mahobe

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Raghav Mahobe

19 reads

As limited capacity and steep rise in fares to some of the most sought-after destinations in the Middle East and Southeast Asia may suggest revising India’s air service agreements to these routes as logical, domestic carriers’ interests and airport constraints call for a more careful approach.

April 30, 2024

10 MINS READ

Key Takeaways

India has repeatedly refused to update bilateral air service agreements for many popular international destinations like Dubai and Singapore
This has led to nearly exhausted seat capacities on many such short-haul routes, with airfares for these destinations soaring
If bilaterals are revised, the carriers and the government worry the former will lose ground to major foreign carriers who dominate India’s international air travel market
To break the deadlock, experts suggest careful, balanced renegotiations of bilateral rights and focusing on increasing capacity from smaller airports

India is gearing up for what could be its busiest summer air travel season yet. While some reports suggest online travel firms have experienced nearly 150% growth in travel searches, international travel is seeing demand rise by as much as 15-20%.

While India’s international travel segment is still to breach its pre-pandemic high of nearly 64.2 million inbound and outbound passengers set in 2019, this may finally be the year it eclipses that number. In 2023, passengers inbound and outbound to India climbed to 63.9 million, with the quarter ended December seeing an impressive 19% jump compared to the same period in 2022.

Indians are also taking to new tourist destinations. Countries such as Vietnam, Kenya, and Azerbaijan all saw a 2-4X jump in passenger travel in the final quarter of 2023, as per government data. Indeed, to keep pace with the growing demand, India and Vietnam have started talks to increase the quota of seats under their bilateral air service agreement (BASA), according to reports from March.