Reversing its stance the civil aviation ministry has decided to negotiate with governments of Dubai, Abu Dhabi, Oman and Singapore to allow for more flights between India and these countries.
Civil aviation minister Ajit Singh also given nod to Indian carriers to start more foreign flights allocating additional traffic rights till winter 2013. New routes are also being opened up with the ministry giving permission to start services to Rome, Madrid, Barcelona, Moscow, Sydney/Melbourne, Nairobi, Al Najaf (Iraq), Jakarta, Zurich, Ho Chi Minh City and Macao. At present these cities are not served by Indian carriers.
In the last summer schedule Indian airlines were allowed to operate 1074 services per week and the number of services have been increased to 1526 for next summer and 1695 for next winter.
Importantly the government has decided to resume negotiations with foreign states to enhance the seat entitlements available to either side thereby enabling increase in services. The government had come under fire from the Comptroller and Auditor General for liberally enhancing seat entitlements on demand from Gulf and European airlines. These carriers particularly Emirates, Etihad, Qatar Airways and Singapore Airlines were thus able to increase number of flights to India and tap the market to feed their global networks.
In its press statement ministry said Singh has directed the ministry to hold fresh bilateral negotiations to explore possibilities of enhancing additional traffic rights with those countries with whom existing traffic rights have almost got exhausted. These include Singapore, Thailand, Abu Dhabi, Dubai, Saudi Arabia, Oman, Iraq, Macao and Afghanistan.
In its report CAG had noted the capacity on India-Dubai route increased from 10,000 seats/week in 2003 to 54,000 seats/week in 2008-09 and that Emirates was utilising 98 percent of the capacity but Indian airlines were utilising less than half of the approved capacity. In case of Qatar the capacity increased from 2872 seats/week to over 24,000 seats with Qatar Airways utilising over 18,000 seats and Indian airlines put together using 4,000-5,000 seats. Apart from additional seats per week foreign airlines were granted access to more Indian airports.
A senior civil aviation ministry official defended the government move. "We will be negotiating with only those countries where India has exhausted seat entitlements. It is our requirement too. We can not stall the growth of Indian carriers.'' He added that by winter 2013 Indian carriers too will be exhausting the seat entitlements on countries like Singapore and denied that government was acting under pressure from foreign airlines.
Air India's retired executive director Jitender Bhargava said "While the positive aspect is that the rights are being granted to Indian carriers adequately in advance which will enable them to plan well for new destinations, the negative is that the ministry wishes to resume negotiations for more rights with countries surrounding the Indian sub continent. These carriers already have a strong stranglehold on the Indian Market much to the detriment of Indian carriers, hence any more entitlement will harm economic viability still more. Wisdom demands moderation as the existing capacity itself is being used for 6th freedom traffic (onward traffic).''
The opening of global routes for Indian carriers is very welcome. It has been a long standing demand. It will help increase the share of indian carriers in the global traffic emanating from India", says Amber Dubey, Partner and Head-Aviation at KPMG.
"At the same time, we should also allow domestic hubbing for India carriers. For instance the Coimbatore-Chennai leg of a Coimbatore-Chennai-Fankfurt flight should be allowed as a foreign flight. That would allow lower ATF charge and also allow seamless travel to the Coimbatore passenger", Dubey added
According to government rules " The traffic rights allocated for a schedule i.e. summer or winter schedule of a particular year, shall be utilised during the same schedule. Failure to do so shall render the applicant ineligible for allocation of these rights for the next two years. Although periodic reviews are carried out government has so far not taken action on airlines not utilising the traffic rights.