A groundbreaking study reveals an impending aviation capacity crisis between India and the United Arab Emirates, with nearly 27% of projected passenger demand potentially going unserved by 2035 if current air-service limitations remain unchanged. Commissioned by Etihad Airways and conducted by Tourism Economics, the research indicates that one of India’s most critical international air corridors is heading toward severe supply constraints despite booming demand.
The analysis projects annual passenger volumes along the UAE-India corridor could reach approximately 25 million by 2035. However, under existing capacity restrictions, 10.8 million passengers annually would be unable to secure seats. The cumulative unmet demand between 2026 and 2035 could reach 54.5 million passengers—equivalent to more than a quarter of total projected demand in an unconstrained scenario.
The Abu Dhabi-India segment faces particularly acute pressure. Current Air Services Agreement (ASA) provisions cap Abu Dhabi-based carriers at 50,000 weekly seats across 11 designated Indian cities, a limit already fully utilized with load factors consistently exceeding 85% on major routes throughout the year. Without revision, this corridor alone could experience a 13.2-million-passenger shortfall over the coming decade.
This supply-demand mismatch stems from artificial constraints rather than weak fundamentals. India’s sustained economic growth—averaging 7.3% between 2010 and 2024—has dramatically expanded the country’s traveling class, with households possessing means to fly increasing from 24% to 40% during this period. Unconstrained air travel demand to, from, and within India is projected to grow by 7.2% annually over the next decade.
The economic implications are substantial. In 2025 alone, the UAE-India air corridor is expected to support 4 million inbound travelers, contribute $7.7 billion to GDP, sustain approximately one million jobs, and generate $1.2 billion in tax revenues. Under current limits, however, this economic footprint would grow at a modest 3% annually until 2030.
The study identifies significant missed opportunities in India’s tier-2 cities—including Pune, Lucknow, Goa, Mangalore, and Vadodara—which remain excluded from direct Abu Dhabi connectivity due to the ASA’s narrow airport list. This forces passengers through major hubs, increasing travel time and suppressing regional tourism and business potential.
Expanding capacity would yield substantial benefits. A 50% increase in allowed seats would boost GDP contributions at a 5.5% compound annual rate, while doubling capacity could deliver $7.2 billion in additional GDP, support 170,000 extra jobs annually, and generate nearly $1.2 billion in additional tax revenues between 2026 and 2030.
By 2035, improved connectivity could boost India’s GDP by $9 billion, support $550 million in annual foreign-direct investment inflows, and enable $75 million in additional exports. Consumers would benefit from approximately 3% lower long-haul fares and a $91-million increase in consumer surplus for over seven million travelers.
The report concludes with an urgent call for policy action, warning that without immediate renegotiation of the bilateral agreement, air travel between India and the UAE risks becoming increasingly constrained, leaving billions in economic potential unrealized.