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Source: The post is based on the article “No more rights to foreign carriers in India. Why?” published in Livemint on 23rd March 2023
What is the News?
India says it has no plans to provide any more flying rights or ‘bilateral rights’ to foreign airlines, as the country wants its own carriers to become global players.
What are bilateral air service agreements?
Bilateral air services agreements are between two countries, and they regulate the number of flights airlines can operate.
India has signed such agreements with 116 countries. These can either limit the number of flights operated between two countries or allow unlimited access.
For instance, India has open skies agreements with the US and UK, which allows carriers from both sides to operate an unlimited number of flights between the two countries.
What do foreign airlines want?
Foreign airlines, especially those from West Asia and Southeast Asia have always wanted more entitlements under bilaterals.
Any increase in seats will give foreign carriers access to the Indian market and help fill their flights to Europe and the Americas, beyond their home country. An estimate suggests that 50-80% of Indian passengers boarding large foreign carriers from India, fly beyond the airline’s home country.
Most foreign airlines on these routes have already used up their permitted capacity and have been demanding a further increase in flying rights.
Why is the Indian government against more rights?
The Indian Government wants Indian airlines to become large network carriers or India’s dependence on foreign carriers for connectivity will only grow. Hence, the government has pushed Indian carriers to fly to Europe and the Americas from India.
What could be the impact on air travel?
Fares are a function of capacity and demand. For consumers, ‘no more foreign flights’ would mean high fares in the near-to medium-term.
In the near term, fares are expected to be high on routes where the capacity is limited and demand is strong such as India-Dubai and on routes where flights are few despite open skies such as India-US.