Freedom to fly

Air Indias monopoly on international routes must go,and the field levelled for eager private carriers.

Air Indias monopoly on international routes must go,and the field levelled for eager private carriers

Limitless largesse and chronic financial irresponsibility from government was never going to do Air India any good. Thats to say nothing of the consistent damage done to the civil aviation sector when its not in the best of health. Therefore,news that the government is considering doing away with AIs monopoly on international flying rights is welcome. As reported in this newspaper on Monday,AI may have to say goodbye to its right to first refusal after all. Private Indian carriers have been flying overseas for almost a decade,but they have had to make do with a non-level playing field.

By this privilege,AI has enjoyed the lone right to the entire seat capacity agreed between India and a second country,called bilaterals. Private carriers were left to pick up the crumbs AI would leave them. However,that doesnt mean AI did justice to its monopoly. Far from it,75 per cent of flying rights on profitable routes such as the Middle East remain unutilised. For Dubai,the most profitable route,the figure is 44 per cent. In Europe,only 10 per cent of the capacity is utilised and 95 per cent of the market left to foreign carriers. No Indian carrier flies to Spain,Denmark,Norway,Sweden and Switzerland. For ASEAN,the Far East and the Asia-Pacific,foreign carriers make up 55 per cent of the market. If thats what AI has been doing with its right to first refusal not being able to service its given capacity and not letting others in either the government was wrong to withhold approval for the approximately 50,000 overseas seats private airlines had sought last year.

Liberalising international flying rights and thereby levelling the field needed urgent attention. Instead of continuing to protect loss-making AIs interests,the civil aviation ministry ought to carry through its proposal. AIs losses for 2010-11 amounted to Rs 6,994 crore and its debt burden is around Rs 44,000 crore. In April-September last year,AI met total costs on only two of its 175 domestic and foreign routes. AI needs disinvestment and downsizing,not perverse privileges. The space thus freed up could be better utilised by those with the eagerness and resources to use it.