The Hindu Business Line : Ministry opposed to open skies pact with Asean now

To fly or not
Pact would benefit only big S-E airlines
By 2015, Indian carriers would be stronger
Air India, Indian to induct 100 aircraft by 2012
India may be pressured to sign more agreements

New Delhi , Nov. 5

The Civil Aviation Ministry has expressed reservations about joining the open skies agreement of the Asean by 2010, mainly on the grounds that it could act against the interest of domestic public and private airlines.

The Ministry has said that if at all India were to get into such an arrangement with the Asean, it should be considered only for flights to and from each of the countries of the regional bloc, and that too only after 2015.

Most of the Asean countries plan to follow an open skies regime from 2010 and have invited India to be part of the planned liberalisation.

An open skies agreement allows the designated airline of a particular country to operate unrestricted flights to another country.

The 10-member regional bloc includes Malaysia, Singapore, Thailand, Indonesia and the Philippines.

Industry observes are of the opinion that if India joins the regime now it would benefit only the big airlines of the South-East Asian region.

They added that the agreement would be detrimental to the proposed business plans of Indian public and private sector airlines.

"All the airlines in India have announced plans to acquire more aircraft and expand their international presence by starting flights to the US, Canada and China, among others," industry sources said.

"If an open skies agreement is reached, then airlines from the region with their global network and huge fleet would not only be able to take passengers from India to their home base but also onwards to other countries. This would be detrimental to the plans of Indian carriers, which plan to operate globally."

While Air India and Indian plan to add more than 100 aircraft by 2012, the private sector airlines also plan to induct new aircraft, including five 550-seater Airbus A380 aircraft by Kingfisher Airlines.

Since this would also imply heavy repayment commitments, it is expected that by 2015 Indian carriers would not only have inducted more aircraft but established themselves both financially as well in terms of global network and be better equipped to take on competition.

Singapore Airlines, Thai Airways and Malaysian Airlines have also announced plans for inducting new aircraft, including 22 Airbus A-380 between them.

Besides, industry has expressed fears that an open skies agreement with one regional bloc could see pressure being mounted on India to reach similar agreements with other blocs, including the Gulf region.

A clear picture on India's stand on the issue is expected in December this year at the Indo-Asean summit to be held in Cebu, Philippines.