Domestic Carriers Advocate For New Opportunities on Bilateral Rights

Over the past decade, the BJP government has maintained a firm stance against granting additional bilateral rights to foreign airlines. Their decision has been condemned vastly by many Indian and domestic carriers. However, in a fresh turn of events, domestic carriers Akasa Air and IndiGo, who advocate for granting fresh bilateral rights to foreign carriers, may see their wish fulfilled if the civil aviation ministry is allocated to the Telugu Desam Party (TDP).

The TDP, with its historical stance in favor of expanding bilateral rights, could influence a significant policy shift, impacting India’s air cargo and passenger transport sectors. TDP’s Ashok Gajapathi Raju, who served as civil aviation minister from 2014 to 2018, has been a proponent of increasing such rights. He also proposed to allow more flying rights to UAE-based carriers back in 2017, however, it was stalled due to unavoidable circumstances.

However, the discussion on fresh bilateral rights has gained traction recently, especially with the emergence of Akasa Air. At the CAPA India summit, Akasa Air founder and CEO Vinay Dube emphasized the importance of increasing bilateral rights to West Asian carriers, highlighting the significant trade volume between India and the Middle East. “There is a tremendous amount of trade that we do with the Middle East. And that trade requires us to fly there. My view is that this should be recognized by the ministry,” Dube stated.

IndiGo CEO Pieter Elbers also echoed this sentiment, advocating for a holistic review of bilateral rights. Both leaders underscored the necessity of these rights for fostering better connectivity and trade.

Contrarily, Air India remains opposed to the granting of additional bilateral rights. CEO Campbell Wilson expressed concerns that increased rights for Gulf carriers could hinder the growth of Indian carriers’ long-haul operations to North America and Europe. Speaking at the CAPA summit, Wilson remarked, “Indian carriers recently ordered more than 1,000 aircraft. We have an appetite for more. We are committing to that on the basis that there would be an economic return to that investment, which, if you add it all, is well over USD 100 billion. If the rug is pulled from under us by granting more bilateral rights, and if we can’t fly those aircraft, we will not take them.”

Currently, the India-UAE bilateral agreement allows Dubai-based airlines to carry 66,000 passengers to and from Indian airports per week, with separate quotas for Abu Dhabi and Sharjah. Indian carriers have similar rights to Dubai. However, industry sources indicate that these rights are exhausted, predominantly by older carriers like Air India, limiting opportunities for newer entrants like Akasa Air.

Due to these constraints, newer airlines are left with less lucrative routes, such as Sharjah and Qatar, pushing them to advocate for fresh bilateral rights. This pre-2014 bilateral arrangement, viewed as lopsided by the BJP government, has been a point of contention, with calls for Indian carriers to deploy larger aircraft to increase passenger capacity instead of relying on additional bilateral agreements.

The potential shift in policy could open new avenues for Indian carriers, particularly those looking to expand their cargo and passenger services to lucrative Middle Eastern destinations. The strategic reallocation of bilateral rights could enhance trade connectivity, benefiting sectors reliant on efficient air transport.

As discussions continue, the civil aviation industry’s stakeholders eagerly await a potential policy shift that could redefine India’s aviation landscape, balancing between fostering growth for domestic carriers and leveraging international connectivity for economic benefits.

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