The Hindu Business Line : Pvt airlines allowed to fly overseas; Gulf excluded — 5-year experience norm set; Jet, Sahara to benefit

THE Government on Wednesday decided to allow private sector domestic airlines that have completed five years of operations and have a fleet strength of 20 aircraft to operate flights to all international destinations except those in the Gulf region.

The immediate beneficiaries of the latest Cabinet decision would be Jet Airways and Air Sahara, which meet the laid down criterion. The moratorium on private airlines flying to the Gulf region will continue for the next three years, the Cabinet decided.

During that period only Air India, Indian Airlines and their subsidiaries will be allowed to operate flights to the various regions in the Gulf including United Arab Emirates (UAE), Qatar, Oman, Bahrain, Kuwait and Saudi Arabia.

Currently, the bulk of operational revenue and profits of both Air India and Indian Airlines accrue from these routes.

The Government will now consider the request of all the eligible airlines for additional entitlement while conducting bilateral air service negotiations.

Official sources said that from now four airlines — Air India, Indian Airlines, Jet and Air Sahara — would be the designated airlines of India and efforts would be made to obtain traffic entitlement commensurate to the requirements.

However, where the total entitlement falls short of requirements of the eligible airline, allocation of entitlement among them would be on the basis of the available seat kilometre deployed by them in the domestic sector in the last five year.

Furthermore, the Cabinet also agreed to the Civil Aviation Ministry's proposal to discontinue the practice of mandating commercial air services agreements apart from reviewing and progressively phasing them out over the next five years.

The Ministry had put forward this suggestion to encourage greater connectivity, create a level playing field, reduce passenger tariffs and ensure viability of operations. However, the airlines will be free to enter into such cooperative marketing arrangements as are mutually agreed upon between them.

Besides, the Cabinet also called for improved "operational synergy" between Air India and Indian Airlines. All Cabinet proposals will come into effect shortly.

Later addressing a press conference, the Minister for Civil Aviation, Mr Praful Patel, said that the Cabinet decision was "bold, progressive and liberal".

The Minister added that the decision has come at a time when the private sector has established itself in the Indian skies with a market share of almost 60 per cent.

In response to another question on why there was a three-year ban on private airline flying to the Gulf and a five-year criterion for them to fly abroad, the Minister said, "Government policy is evolving. There is nothing sacrosanct. If there is a boom we may review it."

Meanwhile, the two private sector airlines are firming up their plans for more international operations.

When contacted, an Air Sahara spokesperson said it would look at launching flights to South East destinations such as Singapore, Hong Kong and Malaysia during the first phase.

"We will also look at flights to Europe and US in a phased manner," the spokesperson added.