AI monopoly over foreign routes ends, govt allows pvt airlines to expand overseas

Air India would no longer enjoy exclusive privilege over all bilateral air traffic rights with foreign countries as the government has decided to allow all Indian carriers to use these rights.

The government had imposed a freeze on private carriers to expand abroad in March last year with the objective of protecting the financially strained Air India from more competition on foreign routes.

As Air India had since inception continued to enjoy exclusive right (Right of First Refusal) over foreign routes due to its historic monopoly over foreign routes, private airlines could operate only when the national carrier said it would not operate on them.

[caption id=“attachment_213665” align=“alignleft” width=“380” caption=“Reuters”]  [/caption]

As a result, several routes and flying slots remained unutilised.

India has been under-utilising its bilateral agreements under self-imposed restrictions because struggling Air India, the country’s flag carrier, was unable to use the maximum limit.

More from Business

Hyundai India’s Rs 27,870 crore IPO oversubscribed by 2.28X, largely driven by institutional investors How Indian fintech startups are driving Malaysia’s UPI-like digital payments revolution

However, Air India’s operational plans would get due consideration when traffic rights and entitlements are allocated, new changes made in the bilateral policy show.

The Civil Aviation Ministry has now decided to allow all scheduled Indian carriers, including Air India, to utilise allocated bilaterals till they reach the maximum permissible limit under Air Service Agreements (ASAs) with various countries, an official spokesperson said.

The ASAs fix the maximum number of flights or seats to be operated by designated carriers of both countries each week.

The allocation of traffic rights to Indian airlines would now on 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 factors, the spokesperson said.

Impact Shorts

More Shorts

Tata Harrier EV vs Mahindra XEV 9e: Design and road presence compared

As Trump weaponises tariff, Fed sees a bigger worry: Not jobs, but rising prices in America

The utilisation of these rights by airlines would be regularly monitored and oversight maintained on them 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.

The move is a big positive for all carriers, said Kapil Kaul, regional head of the Centre for Asia Pacific Aviation, a consulting firm.

Most Indian airlines are losing money as a result of high fuel costs, huge debts, cutthroat competition and a slowdown in the economy.

Agencies