Corporate Nov 9, 2012
At present Indian carriers do not use even a fourth of the seats which are allowed under various bilateral air service agreements (ASAs). Put simply, this means even when an Indian carrier is allowed to mount flights to certain overseas destinations, it does not use all available seat capacities, resulting in foreign carriers gaining a clear monopoly over Indian skies on most routes.
But this does not seem to have deterred Civil Aviation Minister Ajit Singh from announcing about 60 percent increase in traffic rights to Indian carriers between now and the winter schedule of 2013.
Till the summer schedule of 2012, Indian airlines were allowed to offer 1074 services per week on international routes but after today, this number has jumped to 1695 services per week from the winter schedule of 2013. Why is the government allowing domestic airlines permission for more seats on international routes given their poor show till now?
According to the story in the Indian Express , India has signed ASAs with over 109 countries and there are 8,34,000 weekly seats available on international air routes. Indian carriers utilise 22.7 per cent of the quota available, which will increase to 40 per cent after IndiGo, SpiceJet and Jet Airways start flights to new short-haul and long-haul international destinations.
As per the statement released by the ministry this evening, budget carrier SpiceJet will see the maximum increase in permissions (more than three times) for overseas flights, from 70 now to 230 by the winter of 2013. IndiGo will increase its flights by about 50 percent to 172 from 116 now while Jet Airways will increase international operations by about 44% to 602 services per week from 417 now.
For the first time, Indian airlines will fly to destinations like Rome, Madrid, Barcelona, Moscow, Sydney, Melbourne, Nairobi, Iraq, Al-Najaf and Tashkent from Delhi and Mumbai.
This will be the first time that Indian private airlines are allowed bulk new international flights after Singh revoked Air India's long held monopoly over international routes through its first right of refusal.
The minister has also okayed fresh bilateral negotiations to explore for enhancing traffic rights with those countries with whom existing traffic rights have almost got exhausted. These include Singapore, Thailand, Abu Dhabi, Dubai, Saudi Arabia, Oman, Iraq, Macao and Afghanistan.
While this will benefit Indian airlines, it could well bring major relief to some international carriers like Emirates, Qatar, Singapore Airlines and Thai Airways as well.
But the question is: when Indian carriers, just like most airlines around the world, are in deep debt with mouting losses, would they like to expand their global footprint so fast?
Go Air is absent from the list of entitlements the government has released today, perhaps signalling its cautious approach to expansion. The other, though obvious, omission from the list is Kingfisher Airlines.
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