Private airlines can fly overseas now

5-year flying experience needed; Gulf sector off limits.

The Union Cabinet today allowed private Indian carriers with experience of five years and fleets of 20 aircraft to fly to all international destinations, barring the Persian Gulf.

The government expects private carriers like Jet Airways and Air Sahara to start services on new international routes by April 2005.

So far, Jet Airways and Air Sahara have been operating to destinations like Sri Lanka and Nepal and are planning to launch services to Bangladesh.

Industry experts expect the airlines to fly to destinations like Singapore, Malaysia and Thailand right away, while long-haul operations to the US and the European countries will have to wait for another two to three years.

However, the lucrative Persian Gulf routes have been reserved for three years for public carriers Air-India and Indian Airlines.

Briefing newspersons, Civil Aviation Minister Praful Patel said this was being done to compensate the two airlines for the "social service" the two airlines rendered. But he added this decision could be overruled if the need arose.

The Union Cabinet also decided to abolish the compensation foreign airlines pay to Air-India and Indian Airlines for operating flights to India on the premise that Indian carriers need to be compensated for unilateral operations by foreign airlines. With private carriers allowed to fly abroad, the compensation had become infructuous.

In addition, the Cabinet also gave its approval to synergise the international operations of Air-India and Indian Airlines to avoid duplication of effort and to allow the two carriers to cut costs. Patel also said the government was likely to allow Air-India Express, the low-cost subsidiary of Air-India, to operate on domestic routes.

While Jet Airways and Air Sahara hailed the decisions, GR Gopinath of Air Deccan, India's first budget carrier, said: "I do not see any logic in the government's decision. What is so sacrosanct about five years?" Gopinath and Vijay Mallya of Kingfisher Air had lobbied to have the condition removed.

"Countries like Singapore and Australia do not have such restrictions and the Indian government allows new international airlines to operate services to India. Why are the restrictions only on Indian carriers?" Gopinath pointed out.

The civil aviation ministry will now come out with a policy paper on the sector, which will lay down the norms for regulating international operations of Indian carriers.

Going places

SOME GAIN

Jet Airways and Air Sahara

Can start flights to Singapore, Hong Kong, KL and Bangkok; expected to fly to New York in 2-3 years

International carriers

No longer required to pay compensation to Air-India and Indian Airlines

Air-India and India Airlines

Hugely profitable Gulf routes reserved for them for the next three years

Air-India Express

The low-cost carrier will have both domestic and international operations

SOME WAHT

Kingfisher Air, Air Deccan and the new private carriers

These carriers will have wait for at least another four years to start international operations

Indian Airlines

It will not be free to start operations that will compete with Air-India.

Air-India

Will no longer get compensation from international carriers and its market share will come under pressure from the new players