Date:18/11/2006 URL: http://www.thehindubusinessline.com/2006/11/18/stories/2006111806730100.htm

Back New norms for global flights by airlines next year

Our Bureau

Likely to undertaken after the Indian and Air India merger process begins

Proposed move
Could help tilt the balance in India's favour as Air India's market share has fallen to 19 per cent in 2005 from 30 per cent in the 1980's.
A number of existing domestic carriers including Kingfisher Airlines have evinced interest in operating abroad.

New Delhi , Nov. 17

The Union Government plans to review next year the norms allowing domestic airlines to fly abroad. The policy review is likely to be undertaken after the process for the merger of Indian and Air India begins, official sources indicated.

"A calibrated and considered view has to be taken on this issue. We will have to look at the market dynamics and also consider the sustaining power of new airlines that can be designated for flying abroad before approaching the Union Cabinet for any change in the existing guidelines," senior Government officials said.

Gulf flights

As per a Union Cabinet decision of December 2004, private sector airlines that had a minimum fleet of 20 aircraft and completed five years of domestic operations were allowed to operate flights to most parts of the globe except the Gulf region. The moratorium on private airlines flying to the Gulf region is to be in place till early 2008 during which time only Air India, Indian Airlines and their subsidiaries will be allowed to operate flights to the region, namely, United Arab Emirates, Qatar, Oman, Bahrain, Kuwait and Saudi Arabia.

Other destinations

The Cabinet decision allowed Jet Airways and Air Sahara to start operations to various parts of the globe. Currently, Jet Airways has flights to the UK, Sri Lanka, Malaysia, Singapore and Nepal and Air Sahara operates flights to Nepal and Singapore.

Officials were categorical in saying that domestic carriers could not be allowed to simply start up an airline and launch global operations. "Being almost as big as a continent, India is in a unique position. We will have to follow a calibrated approach on this issue that balances the interest of the domestic flyer as well as ensures that all the international traffic is not carried away by international carriers," officials added.

The proposed move to allow Indian private sector airlines to fly abroad could help tilt the balance in India's favour as Air India's market share has fallen to 19 per cent during 2005 from 30 per cent in the 1980's.

A number of existing domestic carriers including Kingfisher Airlines have evinced an interest in operating abroad.

The Chairman of Kingfisher Airlines wrote to the Government protesting against the 2004 Cabinet decision. "When we are allowed to transport people from Delhi to Chennai, why should we be prevented from carrying on to Colombo," Mr Mallya argued.