Ajit Singh policy will end free run of foreign airlines

New Delhi: Civil Aviation Minister Ajit Singh seems to be a man in a hurry. A few weeks after he took away Air India’s first right of refusal on foreign routes and allowed private airlines to fly to more international destinations, his ministry has suggested a freeze on further flights by foreign airlines into India.

The proposed freeze is to bring better parity between the number of foreign airlines flying to India and the number of flights Indian carriers are able to make to foreign destinations. Of the total bilateral traffic rights available with India, only 30-35 percent are being utilised by Indian airlines while foreign carriers take the bulk of India’s international traffic.

In a consultation paper floated last weekend, the ministry has revealed that Indian airlines do not use even a single seat entitlement allowed under bilateral traffic rights to countries such as Australia, Switzerland and Turkey, as also Kenya, Nigeria and Ethiopia. Obviously then, Swissair and Turkish Airlines are taking Indian passengers to their countries and offering them onward connections- when this traffic can well be serviced by desi airlines.

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[caption id=“attachment_332803” align=“alignleft” width=“380” caption=“Our airlines are using just 6 percent of the seats available to them under bilaterals to China- a major trading hub -and a mere 12 percent to Malaysia, a popular tourist destination. Reuters”]  [/caption]

Our airlines are using just 6 percent of the seats available to them under bilaterals to China- a major trading hub -and a mere 12 percent to Malaysia, a popular tourist destination. Even to Gulf countries such as Bahrain and Qatar, Indian airlines are using just a little over a fourth of the entitlements; for Dubai its a respectable 62 percent whereas to Hong Kong it is 65 percent.

Though the paper doesn’t say why this situation has developed, it is obvious that Air India’s first right of refusal ensured that it vetoed other Indian carriers’ demands for permission to fly new routes even when it could not mount flights to these destinations itself.

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The ministry has now recommended that all bilateral air service agreements with other countries should be “revisited” to ensure that none of the Indian carriers are disadvantaged. “The foreign carriers’ request for further opening up access has to be limited until a point has (been) reached where the Indian carriers have fully utilised the underserved bilateral agreements, and/or have acquired the same access to the country that is requesting the bilateral.”

The ministry’s paper said that since October 2011 no fresh additional flying rights have been given to airlines from the Middle Eastern countries. It is interesting to note that this suggestion on freezing further rights to foreign carriers till Indian airlines pull up their socks follows a scathing report by the Comptroller and Auditor General (CAG) last year. In it, the auditor had alleged that total passengers carried from and to India during 2009-10 by Gulf carriers - Emirates, Jazeera Airlines, Qatar Airways, Oman Air, Gulf Air, Etihad Airways and Kuwait Airways - was 87.06 lakh. This was twice the total passengers carried by all South East Asian airlines and more than twice the number carried by European carriers put together. It had alleged that an undue bias was shown to Gulf carriers in granting traffic rights.

At the same time, a report by the Confederation of Indian Industries (CII) had pointed out that by granting Gulf carriers access to a large number of interior points in India, foreign carriers have been funnelling Indian traffic over their hubs. “This has adversely affected the growth of strong hubs in India to the detriment of Indian carriers (both domestic and international operations)”.

The CII study had also said that “6^th freedom” carriage to and from India by Emirates is the highest at 2.4 million passengers, which is 59 percent of the traffic on that route. “Even Air Arabia, a low-cost carrier which is supposed to work on the model of point-to-point sales, had 43 percent “6^th freedom” traffic. Sixth Freedom Traffic Rights refer to the right of any foreign airline to carry passengers or cargo from India to a third country via their own country.

So the ministry’s consultation paper is perhaps an acknowledgement of some wrong policies of the previous regimes. Recently, SpiceJet has been allowed to fly to Tashkent, Teheran, Singapore, Bangkok, and Kuala Lumpur besides Dubai, Muscat and Riyadh. Even Jet Airways and Indigo have been allowed several new international routes.