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Ajit Singh wants more sky opening

Source : BUSINESS_STANDARD
Last Updated: Sat, Nov 10, 2012 04:11 hrs
Foreign airlines in India cannot settle transactions overseas - RBI

Reversing its stance, the civil aviation ministry has decided to negotiate with the governments of Dubai, Abu Dhabi, Oman and Singapore to allow more flights between India and these countries.

Minister Ajit Singh has also given a nod for Indian carriers to start more foreign flights, allocating additional traffic rights till the winter of 2013. New routes are also being opened, with the ministry giving permission to start services to Rome, Madrid, Barcelona, Moscow, Sydney/Melbourne, Nairobi, Al Najaf (Iraq), Jakarta, Zurich, Ho Chi Minh City and Macao. At present, these cities are not served by Indian carriers.

In last summer's schedule, Indian airlines were allowed to operate 1,074 services a week. This has been increased to 1,526 for next summer and 1,695 for next winter.

The government has decided to resume negotiations with foreign states to enhance the seat entitlements available to either side, thereby enabling an increase in services.

The government had come under fire from the Comptroller and Auditor General (CAG) for liberally enhancing seat entitlements on demand from Gulf and European airlines.

These carriers - particularly Emirates, Etihad, Qatar Airways and Singapore Airlines - were, thus, able to increase the number of flights to India and tap the market to feed their global networks.

In a statement, the ministry said Singh had directed officials to have fresh bilateral negotiations to explore enhancing the traffic rights with countries where the existing ones have been almost exhausted. This would cover Singapore, Thailand, Abu Dhabi, Dubai, Saudi Arabia, Oman, Iraq, Macao and Afghanistan.

Capacity on the India-Dubai route, noted the CAG, rose from 10,000 seats/week in 2003 to 54,000 seats/week in 2008-09 and Emirates was utilising 98 percent of the capacity. However, Indian airlines were utilising less than half. In the case of Qatar, the capacity rose from 2,872 seats/week to a little over 24,000, with Qatar Airways utilising 18,000 seats and Indian airlines together managing just 4,000-5,000 seats. Apart from additional seats in a week, foreign airlines were granted access to more Indian airports.

Said a senior ministry official: "We will be negotiating with only those countries where India has exhausted seat entitlements. It is our requirement, too. We cannot stall the growth of Indian carriers.'' By Winter 2013, he said, Indian carriers would have exhausted the seat entitlements for some countries, such as Singapore.

Air India's retired executive director, Jitendra Bhargava, said: "While the positive aspect is that the rights are being granted to Indian carriers adequately in advance, enabling them to plan well for new destinations, the negative is that the ministry wishes to resume negotiations for more rights with countries surrounding the Indian sub-continent. These carriers already have a stranglehold on the Indian market, much to the detriment of Indian carriers. Hence, any more entitlement will harm economic viability still more. Wisdom demands moderation, as the existing capacity itself is being used for 6th freedom traffic (onward traffic).''

"The opening of global routes for Indian carriers is very welcome. It has been a long-standing demand. It will help increase the share of indian carriers in the global traffic emanating from India," says Amber Dubey, partner and head-aviation at KPMG. "At the same time, we should allow domestic hubbing for India carriers. For instance, the Coimbatore-Chennai leg of a Coimbatore-Chennai-Frankfurt flight should be allowed as a foreign flight. That would allow lower ATF (aviation turbine fuel) charge and also allow seamless travel to the Coimbatore passenger."

According to government rules: "The traffic rights allocated for a schedule i.e. summer or winter schedule of a particular year, shall be utilised during the same schedule. Failure to do so shall render the applicant ineligible for allocation of these rights for the next two years." Although periodic reviews are done, the government has so far not taken action on airlines not utilising the traffic rights.


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