India plans to auction seats to foreign airlines

India could become the first country globally to “auction” seats that foreign airlines want to operate to India. Earlier India used to grant seats to foreign airlines only after completing negotiations.

The idea behind the move is that international airlines that have already exhausted their entitlement of seats they can operate to India will need to buy additional capacity through an auction, said a senior official of the Ministry of Civil Aviation who declined to be identified.

At present, it is the Indian government and the foreign state from which the airline is operating that decide on allowing more flights. Currently these seats are given free of charge.

The idea of having an auction is one of the proposals put forward in the draft civil aviation policy which is currently being finalised by the Ministry of Civil Aviation.

One of the reasons behind this idea is that airlines from India are unable to operate to many of the countries with which India has exchanged air services bilateral agreements even as airlines from these countries have exhausted their quota of seats and are eager to expand their services to India.

The Ministry is also hoping that the money collected from the auction of the seats can be utilised to promote regional air connectivity within the country, which is one of the key objectives of the draft civil aviation policy.

The draft policy has suggested auctioning of seats for airlines which operate from countries which are within a 5,000 km from India.

In effect the proposal means that carriers from the Middle East and South East Asia which have already exhausted their entitlement for operating flights here may have to use the auction route.

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