No new flying rights for Dubai, Qatar & Singapore

By On October 22, 2018

No new flying rights for Dubai, Qatar & Singapore

No new flying rights for Dubai, Qatar & SingaporeBy Mihir Mishra, ET Bureau|Updated: Oct 23, 2018, 08.31 AM IST

Under the new civil aviation policy, any move to increase rights can only take place if Indian carriers utilise at least 80% of the entitlement on those routes.
India plans to keep bilateral flying rights with Dubai, Singapore and Qatar unchanged after domestic carriers objected to an increase on the grounds that their international plans would be hit, an official said.
The move could, however, be against the interests of consumers and hurt one of India’s newer airlines, analysts said. Under the new civil aviation policy, any move to increase rights can only take place if Indian carriers utilise at least 80% of the entitlement o n those routes. All three had asked for an increase in rights as the destinations qualify on this count.
Indian carriers have used up rights to Dubai fully and those to Qatar by about 90%. With new Singapore flights having been started, utilisation on that route has breached the 80% mark. Emirates, Singapore Airlines and Qatar Airways carry a large percentage of onward traffic from India to Europe, the Americas and Africa through their home bases. The government decision comes as Indian carriers such as IndiGo and SpiceJet are aggressively expanding operations to international destinations.

“The objection by Indian carriers has been on the grounds that these carriers carry a lot of sixth-freedom traffic through their hubs, thus taking away business from Indian carriers,” said the senior aviation ministry official cited above. “We have accepted their concer ns and would not be agreeing on any increase in foreign flying rights with these countries.”
He also said that there was little support for the view that the government should increase rights marginally, as Indian carriers are close to the limit.
'Against Concept of Free Market'
Sixth-freedom traffic refers to those who take flights beyond the home base of the airline, for instance a Singapore Airlines passenger who flies to the island city and then on to Los Angeles on the same carrier. IndiGo and SpiceJet, with newer planes in their fleets, are adding flights on international routes. IndiGo is said to have plans to launch one-stop flights to London, while SpiceJet is considering long-haul flights. Both airlines have also announced flights to Hong Kong.
While an unchanged limit may favour some carriers, it may not be good news for airlines like Vistara that have applied to the ministry to fly overseas and have sought rights to fly sh ort-haul destinations that include Singapore, Male and others. Vistara is jointly owned by the Tata Group and Singapore Airlines. Analysts said the government should not limit rights as this wouldn’t be in the best interests of consumers.
“This move would not only take away options from the consumer but also goes against the concept of free market,” said Mark Martin, CEO and founder of aviation advisory Martin Consulting. “By blocking any more bilateral foreign flying rights, the government will be taking away options from consumers and forcing them to fly certain carriers â€"Indian carriers in this case.” The government has been cautious about increasing bilateral flying rights following the stance of its predecessor that some domestic carriers have criticised as being overgenerous.
ET reported on October 4 that Enforcement Directorate was investigating bilateral air services agreements signed with West Asian countries between 2001 and 2012. The investigation wi ll also look into the impact that the bilateral agreements had on the operations of debt-laden Air India.
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