Flight fares to remain high on strong demand

Dubai: Despite Gulf and Indian air carriers increasing capacity and flights between the two regions, fares are unlikely to come down while demand for seats remains high, according to a survey. As per the new Visa Global Travel Intentions Survey, 2011, released here by Arabian Business weekly magazine, India was voted one of the top global destinations for travellers from the UAE this year and continues to be popular with travelers in the Gulf.

"India is consistently popular with people living in the UAE, both because it is home to a large population of expatriate Indians who come to work here in the UAE, but also because of its relatively close proximity, extensive and good value travel links," said Kamran Siddiqi, the General Manager for Visa Middle East.

Air India already operates around 53 weekly flights to Dubai and its low-fare unit, Air India Express, operates 54 weekly flights. Other carriers in the Gulf and India are also looking to tap the lucrative market.

Qatar Airways said India would be one of its key growth markets in 2011 and recently launched a daily service to Kolkata. It already operates 95 flights a week to 12 other Indian cities, including Delhi, Mumbai, Chennai and Goa.

India's largest low-cost carrier, IndiGo, has also announced routes between Dubai and New Delhi and Dubai and Mumbai.

Jet Airways, Air Arabia, flydubai and Jazeera Airways are also eyeing expansion. The growth is said to be long overdue and prices are unlikely to decrease anytime soon, as demand for seats still remains extremely high.

"I know that the Indian carriers as well as Gulf Cooperation Council (GCC)-based carriers and LCCs are increasing their routes to India, but that is just to serve a demand which has been long under-supplied," Basel Abu Alrub, Managing Partner of Utravel in Dubai, told Arabian Business.

The GCC region comprises Oman, Qatar, Saudi Arabia, Bahrain, Kuwait and the UAE. "I expect that airlines will try to hold their rates as much as possible until there is a clear oversupply in the market. But as of now, flights are overbooked to/from India all the time and so increasing the routes to India will only serve in meeting the explosive demand and not diluting the market with empty seats," he said.

Sunil D'Souza, Regional Travel Director at Kanoo Travel, said flights to and from India were routinely full or are operating with high capacity. "Airline offers/prices are yo-yoing based on supply and demand equation to the Indian sub-continent. The traffic scenario to India is always on the higher percentage at any given day/week/month. Hence, the percentage of reduction in fares is minimal and seasonal," he said.

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