Date:30/12/2004 URL: http://www.thehindu.com/2004/12/30/stories/2004123006151100.htm

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Private airlines allowed to fly abroad

By Our Special Correspondent

NEW DELHI, DEC. 29. In a major move forward on the `Open Sky' policy, the Government today permitted Indian private airlines to operate on international routes, except the Gulf countries, which offer lucrative business to the national carriers. The restriction on flights to the Gulf is for the next three years.

The decision evoked an immediate protest from the Left parties. The Polit Bureau of the Communist Party of India (Marxist) urged the Government to reconsider it since the indiscriminate opening up of the international sector to foreign airlines since 2000 together with today's decision would be a major blow for the national carriers, particularly Indian Airlines. The national carriers were affected by the "National Democratic Alliance Government's refusal to allow acquisition of new aircraft.''

The Polit Bureau was unhappy that the decision came despite the Left parties jointly requesting the Government to refrain from making it.

Stipulation

The Cabinet approval for Indian scheduled carriers to operate on international routes is subject to the condition that only those airlines with a minimum of five years continuous operations in India and having a minimum fleet of 20 aircraft would be allowed. Going by this stipulation, at present only two private carriers, Jet Airways and Air Sahara, would be eligible to fly the main international routes. Now, these two carriers operate only to neighbouring Sri Lanka and Nepal.

While detailed guidelines for additional routes are to be drawn up by the Ministry, the Cabinet decided that the request of all eligible airlines would henceforth be taken into account in bilateral negotiations and efforts would be made to obtain air traffic entitlements commensurate to the requirement of all eligible airlines. However, in case the total entitlements fall short of requirements projected by the eligible airlines, inter-se allocation would be the ratio of Available Seat Per Kilometre deployed by the eligible airlines on domestic routes over the last five years. Due consideration would be given to the operational plans of Air India and Indian Airlines while allotting entitlements to Indian scheduled carriers.

For the national carriers, Air India and Indian Airlines, the Cabinet approved the Civil Aviation Ministry's course of action suggested for strengthening the national carriers and for establishing improved operational synergy between them.

With a view to encouraging greater connectivity, creating a level playing field, reducing passenger tariffs and ensuring viability of operations, the Cabinet also decided that the practice of demanding compensation from foreign airlines by way of commercial agreements mandated by the Government would be discontinued. All new operations by foreign carriers, both on new destinations as well as on existing routes, would be free from the obligations of the mandated commercial agreements and all existing Government mandated commercial agreements would be reviewed and phased out over the next five years.

Briefing the media after the Cabinet meeting, the Defence Minister, Pranab Mukherjee, said private carriers allowed to fly abroad would have to abide by the norms laid down by the Directorate General of Civil Aviation in this regard.

He said the Civil Aviation Minister has also been asked to come out with a policy paper on liberalisation of the sector, including the concept of `Open Sky', for the approval of the Cabinet.