Must restrict flying rights of foreign airlines to aid Indian players

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There is a need to contain foreign airlines from expanding into India by restricting any increase in flying rights so that Indian airlines can grow, Air India chief executive officer and managing director Campbell Wilson has said.

“I think the strategy is to contain traffic rights expansion so that local airlines have the opportunity to spin up and attain scale and become competitive… and then actual liberalisation will happen. It’s very difficult for us to fly an aircraft to North America, if there’s a surplus of capacity that allows people to travel out by someone (airline) else, and so too much just leaks out. India will not get the non-stop capacity from an Indian operator to these markets,” Wilson said in an interview with HT.

“So it’s a balance that has to be struck, allowing the market to grow. But also incubate your local market, because that’s fundamentally the most beneficial thing that you can do for the economy,” he said while replying to a question on India restricting an increase in bilateral arrangements with several countries.

“The idea is to support Indian aviation. I think it’s the right thing to do for the development of Indian aviation, and also Indian business and international connectivity,” Wilson added.

The Indian government has received several requests seeking more bilateral air service agreements or foreign flying rights from major countries such as the UAE, Qatar, Singapore, Indonesia, Malaysia, and Turkey, though none have been entertained so far.

India has such agreements with 109 countries but the country has not revised bilateral arrangements with countries that are aviation hubs since 2014. The government is of the view that countries like the UAE have built their airports with passengers from India and at the cost of Indian airlines. While Air India under government control could not grow, the airline under the Tata Group has placed aircraft orders to increase its presence in international skies.

Mentioning Dubai, one of the beneficiaries of India’s liberal bilateral regime, Wilson said it is carrying 60-70% of the traffic from India to countries beyond Dubai, which Indian carriers would have carried.

At the centre of the bilateral issue are passengers, who fly from India to a third country via a second country also known as sixth freedom traffic in aviation parlance. Wilson argued that these countries should not seek more rights for sixth freedom traffic.

“By population, it would not even be the 20th biggest city in India… the second thing is, if you look at the number of people, the proportion of people that are travelling, uplifted from India, and get off and out of the airport at that intermediate point is 30%, maybe 40%. The other 60 or 70% is going somewhere else that Indian carriers can carry people to. And so it’s a little bit disingenuous for people to say they are constrained. They’re only constrained because they’re not carrying people to their base. They’re carrying people everywhere else. They can stop carrying so many people beyond and they have more seats than they’ll ever need going to their hub.”