The civil aviation ministry has asked for the views of the law ministry on the replies of Swiss International Airlines (SWISS) and Austrian Airlines, owned by German carrier Lufthansa, on their ownership issue.
India had raised objections to the operations of these airlines on the ground that they had violated the substantial ownership and effective control (SOEC) clause mandated under the bilateral air services agreement between the countries. India had threatened to stop all their services stating the ownership of the airlines were not from their respective countries.
Lufthansa had acquired SWISS in 2005 and Austrian in 2009. The former has been operating in India since 2005, while the latter since 2010.
“The airlines have said they are owned by trusts based out of their respective countries. It has become a legal issue now, and we are awaiting the opinion of the law ministry,” said a senior ministry official, seeking anonymity.
He said the government would look into the details of the trusts to ascertain their ownership. “Not only the country of origin of the trusts, but also the country of origin of their members needs to be looked into. We will seek the external affairs ministry's view,” he said.
According to the SOEC clause, any airline can only utilise the seats quota of a particular country f the airlines’ ownership is from that country. The government also has the right to designate one or more airlines; however, its substantial ownership and effective control should be vested in the party designating the airline.
If the substantial ownership clause is not resolves, both airlines would be barred from operating from India. This issue had come to the fore after Air India said SWISS and Austrian were allowed to continue operations after it was bought over by Lufthansa only because of the German carrier's expected support to Air India for joining the Star Alliance, which has Lufthansa as its founding member.
Air India’s entry was shelved after the alliance board said the carrier was not ready to join the alliance.
While SWISS operates 14 flights a week, Austrian operates 11 from Delhi and Mumbai. The two are developing new hubs for Indian travellers flying to the US and other European countries. As much as 63 per cent passengers of SWISS and 86 per cent of Austrian fly under the sixth freedom carriage to and from India (they transit from these countries to other foreign destinations).
