The government of India has decided to permit private Indian airlines to expand operations on foreign routes. While this policy will boost the private carriers’ health, it spells stiff competition for the national carrier, Air India.
In a massive push to private Indian carriers, the Indian civil aviation ministry ended Tuesday the freeze on them to expand their operations on foreign routes.
The freeze was imposed on Indian domestic carriers by the government of India in March last year so as to guard the national airline of the country, Air India, from competition on foreign routes.
The announcement made by the Indian government has brought a sigh of relief for the private operators who had been seeking for authorization to fly overseas routes, which so far were to be first offered to Air India as a part of the flag carrier’s exclusive Right of First Refusal.
While discussing the new agreement on Tuesday, the Civil Aviation Ministry of India was reported as saying: “The Government has decided to allow Indian scheduled carriers, including Air India, to utilise the allocated bilateral till such time they reach the maximum permissible limit under Air Service Agreements (ASAs)”.
In addition to encouraging codeshare agreements between Indian and foreign airlines, steps will be taken for promoting development of hubs for Indian carriers to carry Sixth Freedom traffic and attain a dominating position in the region, the ministry further said.
According to the Sixth freedom right of aviation, airlines can carry travellers or cargo from a second country to a third country by providing a stopover in their own country.
Impact of New Agreement of Air India
Air India is amongst top names that crop in mind of the holiday makers while departing India or booking flights to India. Though the state-run airline serves many destinations including Asia, Australia, Europe and North America, it has been facing several financial crises for quite long.
As per the Internet sources, the new agreement could put an unpleasant impact on Air India. The airline that at present holds over 20 per cent market share of international air travel from India will now experience tough competition from other private carriers including IngiGo, SpiceJet and Jet Airways to name a few.
On the other hand, the agreement can be really rewarding for the flyers, as with the boost in the number of flights operating on international routes, they might be able to gain cheap flight tickets. Even the international flyers seeking flights to India will also have a multiple options to choose from.
High Hopes of Private Carriers with New Agreement
The new agreement will certainly give a significant boost to the Indian domestic carriers who are willing to operate more flights on International routes.
For instance, Spicejet, a low-cost airline known for offering cheap flight tickets is presently serving flights to destinations like Colombo and Kathmandu. The airline is seeking permission to begin flights to Male, Dhaka apart from two destinations in the Commonwealth of Independent States which include Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Tajikistan, and Uzbekistan.