NRIs beware: Flying could get dearer

India plans a major shift in its aviation policy by putting restrictions on landing rights and seats to foreign airlines.

Air travel might be expensive for millions of non-resident Indians (NRIs) from next year as the Government of India plans a major shift in its aviation policy by putting restrictions on landing rights and seats to foreign airlines. According to media reports, New Delhi plans to change the way it allocates capacity to foreign airlines from a state-negotiated method to an auction process to protect domestic carriers from overseas competition. Bilateral rights allow airlines of two countries to operate a fixed number of seats to a limited number of destinations in each other's territory. "Foreign carriers that have already exhausted their seat capacity will need to buy additional capacity through an auction," Bloomberg has reported by quoting an official. Money earned by auctioning the seats will go into subsidising rural flights in India, the official was quoted as saying. The country with a population of more than a billion people has Air Service Agreements (ASA) with 109 countries covering aspects relating to the number of flights, seats, landing points and code-share. The proposed seat auction policy will be enforced only on routes that are within a radius of 5,000km from India, according to media reports. Iata surprised The move surprised aviation specialists and International Air Transport Association (Iata) as this model doesn't exist anywhere in the world. The apex body of aviation wants the Indian government to reconsider its proposal regarding auctioning of air traffic rights to foreign airlines. "Such a policy could lead to distortions between carriers and lead to higher fares," Iata said in its submission. Auctioning of traffic rights may not be compatible with International Civil Aviation Organisation (Icao) policies, which urge countries to adhere to principles of fair and equal opportunity and non-discrimination, it added. Foreign carriers not only offer competitive fares to passengers but also contribute a lot to the country's GDP, foreign exchange reserves and job creation. Emirates airline has exhausted its 6,000 seats per week through 185 flights to and from India per week. Emirates airline contributes nearly $849 million to India's GDP, according to its joint study with India's National Council of Applied Economic Research.   Source: Khaleej Times