15-Feb-2012 8:34 AM

Indian airlines to be allowed to expand overseas operations, Air India loses exlusive rights

India's Ministry of Civil Aviation stated (14-Feb-2012) the Government of India has decided to allow Indian scheduled carriers including Air India to utilise the maximum allocated bilaterals until such time they reach the maximum permissible limit under the respective Air Service Agreements (ASAs). Details include:

  • Impact on airlines: The decision will enable airlines including Jet Airways, IndiGo, Kingfisher and SpiceJet, to expand their overseas operations, meaning Air India will no longer enjoy exclusive privilege over all bilateral air traffic rights with international countries. The carrier has, until now, enjoyed exclusive Right of First Refusal over foreign routes due to its historic monopoly over international routes, meaning private airlines could operate only when Air India said it would not operate on them. The Ministry stated, "Air India’s operational plan will receive due consideration in allocation of the traffic rights and entitlements. The Ministry has supported the approach outlined in the Inter Ministerial Group (IMG) discussion paper in this context";
  • Allocation of rights: The allocation of the traffic rights will be done "well in advance" up to a maximum limit of five schedules "keeping in mind the demands from them, their capacities and capabilities, operational plans and other relevant factors";
  • Monitoring: The utilisation of allocated rights will be subject to regular monitoring and oversight by the Ministry. In case of underutilisation or non-utilisation of the allocated rights, the Ministry may consider cancellation of the rights and levy of appropriate penalty;
  • Codeshares: Under the new arrangement, codeshare operations will also be "encouraged";
  • Sixth freedom traffic: The Ministry said "all possible steps will be undertaken to promote the development of the hub to enable Indian Carriers to carry 6th freedom traffic and attain a dominating position in the region. In order to cater to peoples’ travel, trade and commerce needs to countries where ASAs do not exist, the Ministry will consider creation of traffic rights through ASAs with these countries". [more - original PR]

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