Air Indias monopoly over foreign flights scrapped

* Private carriers to be equal partners in flying international

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The government has put an end to a decade-old monopoly enjoyed by state-owned Air India over foreign flying rights by agreeing to release them to interested private carriers. The implication is that the foreign flying plans of eligible private carriers such as Jet Airways,Kingfisher Airlines,IndiGo and Spice Jet will no longer hinge on Air Indias approval,and they will be able to expand their overseas operations.

The allocation of the traffic rights to Indian Scheduled Carriers shall 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, a ministry spokesperson said,setting the conditions for grant of these rights. The government has based its decision on the consultations of 2004 Inter-Ministerial Group (IMG),which had recommended the move. The policy could not be brought sooner due to the subsequent tabling of the Comptroller and Auditor Generals report on the performance of the ministry which questioned the stance adopted by it over the issue of allowing foreign carriers flying rights, said a senior government official. The controversial CAG report,submitted in 2011,called the ministrys bilateral policy overly generous and one-sided benefiting gulf carriers,and had advocated a freeze on bilateral policy to protect Air Indias interests.

In last one year,requests by private airline for granting 50,000 seats on foreign routes has been lying pending with the government. These include lucrative routes like those to Middle-East and Europe.

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Till this decision came,Air India enjoyed a special privilege called the Right of First Refusal (RoFR),which entitled it to operate full capacity signed between India and any other country under the Air Services Agreement (ASA). In addition,it could block overseas routes for remaining carriers even if it didnt operate them.

The ministry said it will encourage code-share agreements,which allows airlines to share seats on the same flight by working out a mutually agreed commercial arrangement.

A Jet Airways executive said,India was losing market share as Emirates,Qatar and Etihad marched ahead. All airlines had been demanding that they be allowed to utilise these foreign flying rights. Giving an instance,the executive said India has total entitlement of 35 service per week to Paris but Air India is utilising only 4 against that,and rest are going waste.

Cautioning the airlines,the government has decided to take a tough stance on non-utilisation of capacity once granted,which may invite penalties.

Easing the knot

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* AI,till now,enjoyed a privilege,which entitled it to operate full capacity signed between India and any other country under ASAs

* With the government putting an end to the monopoly,foreign flying plans of private carriers will no longer hinge on Air Indias approval

* The government has based its decision on the consultations of 2004 Inter-Ministerial Group,which had recommended the move