India-UAE air services pact gets nod

Controversy had erupted over increased bilateral air traffic rights to UAE nearly four-fold to 50,000 seats per week

The government on Tuesday approved the much-talked about bilateral air services agreement inked between India and the United Arab Emirates (Abu Dhabi) in April this year. This is the first time that a bilateral air services agreement has been ratified by the Cabinet.

A controversy had erupted over the decision of the Indian government to increase bilateral air traffic rights to the UAE by four-fold to 50,000 seats a week, over-riding the recommendations of the inter-ministerial group (IMG) to enhance weekly entitlements by 26,000 seats.

The arrangement has seen strong objections from several political leaders, who had demanded that the government reconsider the decision and freeze the agreement citing, among others, adverse impact on the operations of India’s airlines and airport operators. The prime minister had put the matter in abeyance, directing it be brought to the Cabinet for a decision “in the interest of wider consultations and greater transparency”.

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In a note dated June 13, the prime minister’s office (PMO) said the Cabinet Committee on Economic Affairs note drafted by the civil aviation ministry should mention it had brought certain issues to the notice of ministers for civil aviation, commerce & industry and external affairs, including the fact that the Department of Economic Affairs (DEA) had reservations about the substantial enhancement being granted to the UAE.

The PMO had observed that besides the DEA, some airlines had opposed the request for enhancement. It had pointed out that private airport operators were not likely to support the enhancement, as they had made substantial investments in Delhi, Mumbai, Bangalore and Hyderabad and would like to develop these as hubs for air traffic. An added effect of this enhancement would be that long-distance traffic from India to North America/Europe would be diverted to Abu Dhabi.

The PMO had said that if an Abu Dhabi-based airline acquired Jet Airways, the entity would control the bulk of the seats on this route. There was a possibility that other countries might make similar requests.

 and, hence, a calibrated approach might be necessary.

The PMO additionally asked the ministry to include its comment on the note on ‘Impact of Middle Eastern Carriers on Indian Airlines’ in the Cabinet note.

Defending the decision on the allotment of increased bilateral rights to Abu Dhabi, Civil Aviation Minister Ajit Singh had told Business Standard, “In three years starting 2007, as many as 35,800 seats were granted to Dubai without approval from the IMG. Around the same time, permission for operating weekly flights for Lufthansa was increased to 74 from 50. Indian airlines at the time were flying only seven times a week to Germany. The UAE has been a friend for long and is the richest and most powerful emirate. Concerned ministries had to consider various things including the impact on trade and investment while granting the traffic rights.”

He had ruled out any possibility of a roll-back of the enhanced seat entitlements made to Abu Dhabi.