New formula for foreign airlines’ expansion in India

DELHI: Foreign airlines will now be able to offer more seats on routes to India in cases where domestic carriers have not been able to utilise even one-third of the capacity as per their entitlements under bilateral air services agreements.

A committee of secretaries has issued an order to this effect, devising a new formula to calibrate the opening up of Indian skies to genuine demands of overseas carriers, reports The Economic Times.

The panel, headed by the cabinet secretary, was constituted to discuss reforms in bilateral air services agreements, including auctioning of rights.

“With countries where Indian carriers have not utilised even one-third of the total seat entitlements and do not have any immediate plans, the panel is of the view that bilateral entitlements should be increased,” said an aviation ministry official, who did not want to be identified.

The committee has also suggested a formula for increasing bilateral entitlements of foreign carriers in such cases, the official said. “The committee has suggested selecting the higher one between a flat increase by 10% of the existing capacity and the average of the growth in the past three years in that particular sector,” he said.

Malaysia would be an immediate beneficiary of this order, according to the official, while Qatar would not become eligible for an increase under the scheme because the utilisation by Indian carriers on that route is about 66%.

Analysts, however, said the move did not constitute a long-term strategy. “This could, at best, be termed another incremental move, which may be another short-term measure. It may not benefit many countries seeking more traffic rights,” said Kapil Kaul, CEO of aviation consultancy firm CAPA South Asia.


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