India opens up the market
13 / 02 / 2012
THE Indian government has decided to allow all carriers in the country the use of bilateral air traffic rights with foreign countries, ending Air India’s exclusive claim.
Historically, private carriers could only enjoy the rights when Air India said it would not operate on them. As a result, several routes and flying slots remained unused.
The civil aviation ministry will permit all scheduled Indian carriers, including Air India, to utilise allocated bilaterals until they reach the maximum permissible limit under air service agreements (ASAs) with various countries.
The ASAs fix the maximum number of passenger and cargo flights to be operated by designated carriers of both countries each week.
The utilisation of these rights by airlines would be regularly monitored by the ministry. In case of underutilisation or non-utilisation of these rights, the ministry could cancel them and levy penalties on the airlines, according to the changes made in the policy.
Code-share operations between an Indian and a foreign carrier will be encouraged, but the emphasis will be on promoting the development of hubs to enable Indian airlines to carry sixth freedom traffic rights to boost regional dominance.
In Europe, Indian carriers use less than 10 per cent of the allowed capacity, leaving up to 90 per cent of the market share to foreign carriers. Air India, Jet Airways and Kingfisher fly to France and Germany but Denmark, Norway, Spain, Sweden and Switzerland are not accessed by Indian airlines. In the Asia-Pacific, foreign carriers have 55 per cent of the share.