Several countries, including the United Arab Emirates (UAE), Singapore and Indonesia, have been pushing India to revise air services arrangements but will have to wait as the government is unlikely to grant new flying rights till domestic carriers reach a certain scale in the international space.
These countries have pressed the Indian side to boost the number of seats for their airlines and to get Indian carriers to fly to more destinations in their territories following a significant increase in the number of travellers, especially in the period before the Covid-19 pandemic and following the easing of travel restrictions, people familiar with the development said.
The Indian government has received several requests seeking more foreign flying rights from countries such as the UAE, Qatar, Singapore, Indonesia, Malaysia and Turkiye, though none have been entertained so far. The people said on condition of anonymity that foreign carriers seeking more flying rights to and from India will have to wait since the Indian government is unlikely to grant new rights, especially to countries with aviation hubs.
“There are plans by Indian carriers to expand in the international space and they have ordered planes, including wide body aircraft. We want our carriers to grow in the international space…any fresh bilaterals to countries with hubs is out of the question,” said a government official who didn’t want to be identified.
The aircraft orders referred to is one for 470 aircraft by Air India and another for 500 aircraft by IndiGo. Air India plans to expand in both the short-haul and long-haul international space, and IndiGo plans in short-haul international routes. At the heart of the global aviation industry is what is known as air service agreements (ASA), which are struck between countries as bilateral agreements under the International Civil Aviation Organization (ICAO) framework.
India has such agreements with 109 countries.There haven’t been revisions of bilateral arrangements since 2014 despite airlines such as Emirates, Qatar Airways, Jazeera Airways, Singapore Airlines, and Turkish Airlines, among others, seeking an increase in flying rights. The government is of the view that allowing foreign airlines to expand through more bilateral arrangements will make it difficult for Indian airlines to expand globally.
However, an official from one of the countries seeking a revision of its bilateral air services agreement questioned this negotiating position. “Everyone knows countries negotiate on the basis of existing seat capacity, not capacity based on aircraft that have been ordered and will be delivered years from now,” the official said, asking not to be named.
“We reached full capacity with India several years ago, the flights are always full and fares gone through the roof. We cannot reach the full potential in trade and tourism unless aviation moves,” the official added.
Another official from a country seeking a revision of air services arrangements said their carriers fly to several Indian destinations and flights are always full, whereas services by Indian airlines are limited and have never reached the threshold at which negotiations on reviewing the agreement can be started.
“The Indian side doesn’t seem to have enough aircraft and pilots and the available resources are mainly focused on meeting domestic demands. Due to a combination of policy and capacity problems, slots get congested. The demand far outstrips the supply,” this official said, on the condition of anonymity.
Emirates’ president Tim Clark told an aviation conference early this year that his airline is ready to contribute to India’s growth story. “We are not here to threaten, we are never here to cause worry, we are here to add value to the Indian economy, the citizens of India by providing a range of products which other carriers are not being able to do, operating to multiple destinations where we know the Indian demand is…,” he said.
Dubai Civil Aviation Authority (CAA) director general Mohammed A Ahli, in a letter to civil aviation minister Jyotiraditya Scindia in August 2022, had asked India to make Amritsar, Tiruchirapalli, Coimbatore, Kannur, Goa, Bhubaneswar, Guwahati and Pune additional destinations for Dubai-based carriers. Ahli requested Scindia to consider calling a meeting of the civil aviation authorities of both sides to explore the “possibility of enhancing capacity and services”.
Similarly, Qatar has sought an increase in bilateral arrangements or flying rights since 2013. It has sought a three-fold increase in flying rights. Similarly, Malaysian carriers have also sought an increase in flying rights.
While Qatar is eligible for an increase under rules framed under the National Civil Aviation Policy, Malaysia is ineligible. Under NCAP, cleared by the cabinet in 2016, an increase in foreign flying rights or bilaterals with countries within a 5,000-km flying radius of India will only be triggered if Indian airlines utilise 80% of their quota.
Industry analysts feel India will wait till flights return to pre-pandemic levels. Travel Agents Federation of India (TAFI) president Ajay Prakash said: “Indian airlines, unlike foreign carriers, haven’t been able to fully utilise their capacity. There is an imbalance in utilisation and hence I don’t see the government looking to bring in relaxations in bilaterals. This is a way to protect the domestic industry.”
He added that there is no doubt that more flights lead to better competition in the market, which is better for consumers.
Others feel the government should relax bilateral arrangements. Mark Martin of Martin Consultancy described the government’s strategy to restrict bilaterals as “not right”. He said, “India should move to open skies for passenger transport. Codeshares should be stopped.” Indian aviation is the world’s third largest and fastest growing domestic market, growing at almost 10% for the past decade, almost 2.5 times the global average.
Source: Hindustan Times