The Telegraph
Since 1st March, 1999
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Hint of open-sky pact with Asean

New Delhi, Sept. 13: The civil aviation policy may include proposals for an open-sky arrangement with Asean and private entry into the lucrative Gulf circuit.

The pact with the Association of South East Asian Nations (Asean) will be for unlimited flights between New Delhi and the various state capitals of the economic bloc.

In the meantime, the government is examining the possibility of letting private carriers operate in the Gulf. The sector is the preserve of the state carriers, but the government is keen to revisit the policy following lobbying by private operators for entry into this lucrative sector.

The proposed pact with Asean will be expanded in the second phase to cover cities other than the state capitals. Civil aviation secretary Ajay Prasad said, “There has been no formal offer made to us by the Asean as yet. However, informal discussions have taken place and we are considering becoming a party.”

Prasad said the open-sky arrangement would be extended to other countries too. The pact will be modelled along the agreement in the EU that allows unfettered flights within member countries.

A sore point, according to analysts, is visa-free travel which is a pre-requisite for the open-sky policy.

India may not agree to a visa-free travel arrangement with some Asean states.

Prasad said low-cost carriers in South East Asia are interested in India. Some like SilkAir, the subsidiary of Singapore Airlines, have flights to south India.

Officials in the civil aviation ministry also said the government was mulling over the demands of private operators, such as Jet and Sahara, for flights to the Gulf.

The state carriers have a monopoly over the Gulf routes as a compensation for the humanitarian work done on behalf of the government, such as evacuation of Indians from war zones and regions hit by natural calamities.

The private airlines are lobbying for limited access to new routes in the region and places not covered by the state carriers.

The government, however, prefers to wait for another five years before withdrawing the rights of the state carriers over routes that are not serviced by them.

More private players

Prasad said “about four to five new airlines are waiting for regulatory approval for starting operations in the domestic sector.”

There are two views...those in business feel no more airlines should be allowed (as the competition is too hot). However, those waiting the green signal are keen to start operations,” he said.

Analysts said the high growth rates nothwithstanding, consolidation was likely as the incessant price wars could force some players to down shutters, be put on the block or merge with bigger rivals.

However, the first such merger, between Jet and Sahara, was a non-starter.

Prasad said the government would soon invite expressions of interest for the 35 non-metro airports. EoIs are for private parties that are interested in developing the city side of the airport such as hotels and shopping complexes

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