Will bilateral reforms help Indian carriers?


Except for the US, India doesn’t have an open skies arrangement with any major economy. Open skies would allow airlines to manage capacity with no restrictions. Viewed from that prism, bilaterals are as ancient as they are restrictive.

“They (bilaterals) have gone the way of steam engines, slide rulers, and smoking cigarettes in restaurants,” says Craig Jenks, president of Airline/Aircraft Projects Inc, a New York-based air transport consultancy, reports The Economic Times.

Amber Dubey, head-aerospace and defence at KPMG, a consultancy, says by limiting the seat quota of foreign carriers, India has created an artificial supply constraint. “It is time we junk it.” Indian carriers, in stark contrast, are not even making full use of these agreements.

They use only a third of the capacity allotted to them under bilaterals. A report in the Business Standard said during 2014-15, Indian carriers used seat entitlements only in 29 out of the 109 countries. Through the proposed auctions of unutilised seats, the ministry is also attempting to tilt the balance in their favour.


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