The Telegraph
Since 1st March, 1999
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Foreign dream in reach of new airlines

New Delhi, Sept. 24: The Congress-led government is likely to relent in the face of renewed lobbying by a crop of new airlines to allow them to fly abroad long before they fulfil a government-mandated criteria that requires them to possess five years of operational experience in domestic skies.

Top officials said the government might change conditions at least for the Asean region with which India has signed a treaty that opens up its four metropolitan cities to almost daily flights by any Asean carrier.

Airlines expect a decision to come through in December, which will allow them to plan schedules next summer.

“Several airline barons have approached us and pointed out that start-up airlines like Asian Air have been allowed to fly into India. Hence, it made no sense to block newer airlines out of India. We may look into this as it is a valid point,” top officials said.

New airlines like Kingfisher and SpiceJet have long been lobbying for permission to fly abroad. U.K. Bose, chief executive of Jagsons Airlines and former Air Sahara head, said, “It (the permission) may come as early as December. We have been asking for it for long. If a start-up airline from abroad that meets certain financial and safety criteria can be allowed to fly here, why should we not extend the same benefits to an Indian player'”

At stake is a host of profitable routes where seat occupancy is as high as 80-90 per cent on an average because of a shortage of flights on those sectors. While it is certain that Southeast Asian skies will certainly be opened up, the government has yet to decide whether to allow the newer players to operate flights to Europe and the US.

SpiceJet director Ajay Singh said, “We have always wanted to fly to Asean destinations.” However, most airlines want to touch down at lucrative destinations like Kuala Lumpur, Singapore and Bangkok.

Very few are interested in the other Asean destinations.

Current rules qualify only state-run carriers Air India and Indian Airlines and private carriers — Jet Airways and Air Sahara — to fly to overseas destinations. The state-run carriers, however, enjoy the exclusive monopoly to fly to Gulf destinations.

Jet Airways and Air Sahara are challenging this dispensation and have been pleading with the government to break the monopoly and to allow them into this lucrative sector.

The government had granted this monopoly to the state-run carriers as compensation for the losses they routinely incur in providing services to the government by flying troops and health workers to areas hit by natural calamities and flying out earthquake and tsunami-affected civilians.

A section of aviation ministry officials also feels the experience clause should not be relaxed as its imposition means India “exports air proven services”.

Their point is that things should be allowed to stay the way they are. “Let new players mature and then fly abroad. We do not know how many of them will be around at the end of two to three years.”

Although they have been allowed to fly foreign routes, the private Indian-owned airlines together operate only account for only 35-40 per cent of permitted capacity on these routes.

Foreign airlines are cornering an overwhelming 60-65 per cent of unutilised entitlements. With growing foreign passenger traffic demand due to opening up of the economy and foreign tourist flow, this asymmetry may well increase.

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