Letting aviation take off

The government has done well to adapt civil aviation policy to the changing times.

Private airlines have been in operation on domestic routes for more than a decade, and there is no reason to continue preventing them from flying internationally as well""especially since neither Air-India nor Indian Airlines has been able to use all the slots available under bilateral agreements with other countries.

The Cabinet decision also seems to hint at bringing the two public sector carriers closer together; this too would be welcome. A merger would be premature at this stage, but developing a proper hub-and-spoke system with coordinated flights should not be difficult, especially if Jet and Sahara are able to offer that.

Alternatively, both should be allowed to develop as full-service carriers, operating on both the domestic and international routes.

The promise of freer access to the Indian aviation market through a new "open skies" policy is also to be welcomed, because the primary objective has to be to make travel easy.

So far, it is the airline companies' interests that have driven policy. That this is changing is to be welcomed, and tourism will be the beneficiary.

The cloud on the horizon is of course the terms on which the skies are to be opened up.

A few weeks ago, when asked about the bilateral agreements that govern the number of airline seats into and out of India, the minister for civil aviation, Praful Patel, said that given the proliferation of such bilateral agreements, and given also that India's domestic carriers were not being allowed to buy more planes, it was natural that "someone else will come and take your place ... if we don't use the bilaterals, someone else will.

We can't afford to have less connectivity, whether you have India offering the capacity or someone else." He then went on to say that India had to ensure that there are enough seats into and out of India. India has signed around a hundred bilateral aviation agreements.

Airlines from about half of these counter-party countries fly into India. But India doesn't fly into all of them because Air-India and Indian Airlines don't have enough planes.

The determination to increase capacity is all to the good because India does need more flights into and out of it. But the minister needs to be asked if he has to give up the Rs 250-odd crore that foreign airlines currently pay India to use the capacity provided for under the bilaterals.

These payments are a sort of entry price, and the commercial agreements that mandate them are valid under the International Civil Aviation Organisation (ICAO) regime.

Their net effect is to marginally reduce the profitability of foreign airlines that fly into India. The larger ones, especially, have excess capacity and it benefits them to supplement Air-India's capacity. That is why no one has heard them complaining.

The ministry might therefore like to explain why it wants to give up the revenue. The revenue should be given up only if it can be made up in some other way, not necessarily in money terms perhaps, but maybe in the form of rights being granted by other countries to more Indian carriers.

In other words, the quid pro quo should be clear and of benefit to India and it should be transparent.