The Hindu Business Line : Approach IA directly for agreements, Govt tells private airlines

THE Government has asked the private sector airlines that have reservations about the agreement between Indian Airlines (IA) and Kingfisher Airline to approach the state-owned carrier directly for entering into similar agreements.

Kingfisher recently entered into a "comprehensive agreement" with Indian Airlines to fulfil its obligations of flying on largely uneconomical category II and III routes.

Since Indian Airlines' operations on these routes are in excess of stipulated norms, Kingfisher is to "buy out" the extra operations from the national carrier.

Besides, the "comprehensive agreement'' would also see IA undertake other operations for Kingfisher.

"The total package that we have with Indian Airlines is worth about Rs 120 crore annually to them. I thought that in this day and age of outsourcing it was a good idea to have such an agreement with Indian Airlines. The agreement, valid for two years, is a win-win situation for both the airlines," the UB Group Chairman, Mr Vijay Mallya, said.

A senior official admitted that "at least one or two" airlines had sought Government help for entering into similar agreements with the state-owned airline.

"The agreement between IA and the private sector airline was decided between them. How can we now ask them to negotiate or not negotiate with a particular airline," a senior Government official said.

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