Etihad Airways considers India as critical to its long-term strategy, but feels that capacity constraints have stymied its growth potential in the country despite strong demand, high load factors and rising yields. The biggest constraint is policy (bilateral seat cap), not market appetite, says Etihad Airways Chief Revenue and Commercial Officer Arik De. In an interview with Akbar Merchant, he talks about why airfares continue to climb sharply and what easing capacity constraints could mean for traffic, revenue and long-term connectivity. Excerpts:
Etihad carried 22.4 million passengers globally in 2025, up 21% year-on-year. What role did India play in this growth?
In 2025, we carried around 3.8-4 million passengers to and from India, making it one of our top five markets globally. Growth from India is running at 10-15% annually, but that growth is largely capacity-led. Demand is far stronger than what current seat entitlements allow us to serve.
How do you see India’s position in Etihad’s global network evolving?
India is firmly within our top five markets, by both passenger volume and yield. There is a difference, however, between potential and reality. India’s macro fundamentals are extremely strong, with economic growth north of 8%. If capacity constraints were eased, India could move higher. For now, as other markets grow faster due to more liberal bilaterals, India is likely to remain in the top five.
Is India a profitable and margin-accretive market for Etihad?
Absolutely. India makes money for us. We operate with healthy margins, and that is a prerequisite for sustainability. Load factors from India are close to or above 90%, compared with our global average of about 88%, which underlines both demand strength and pricing discipline.
How does yield from India compare with other outbound markets?
India is among our top five markets by yield as well. This is driven partly by artificially constrained capacity, but also by the diversity of passenger segments we carry — VFR (visiting friends and relatives), leisure, business and premium traffic. Airfares from India are currently more than 15% higher year-on-year, and revenue growth is continuing even without additional capacity. While this is positive for airlines, it raises broader questions about long-term affordability and market development.
Capacity between India and Abu Dhabi is widely seen as constrained. How limiting is this today?
The bilateral has largely maxed out. Without additional seat allocations, passenger growth is difficult. We can make marginal adjustments through partnerships, including Air Arabia Abu Dhabi, but meaningful expansion requires policy action. India is building world-class airports and connectivity demand is rising rapidly. Capacity needs to reflect that reality.
The Airbus A321LR has been introduced on the Abu Dhabi–Kolkata route. What does that say about premium demand from India?
The A321LR has lifted route revenue by over 20% on this route. It is a three-class aircraft, including two first-class suites, and premium cabin load factors are close to 80%. This validates our belief that Indian travellers value a high-quality, seamless product, even on narrow-body aircraft. We are evaluating Hyderabad and Bengaluru for potential A321LR deployment.
How important is India in Etihad’s long-term strategy?
India is strategically critical. We are investing nearly $4 billion in fleet renewal and refurbishments, and over the next 18-24 months, all India routes will feature flat-bed business class, regardless of aircraft type. New-generation aircraft are delivering 10-15% cost savings, mainly through lower fuel burn, supporting margins and sustainability. At the same time, policy constraints matter.
An Oxford Economics study estimates that the India-UAE bilateral limits could cost India 22.5 million passengers, $5 billion in revenue and $1.3 billion in tax revenue over five years. Competition and connectivity ultimately benefit consumers and the economy. India has 1.1 million Etihad Guest loyalty club members, growing at 25% annually, which underlines the long-term opportunity.