Air India loses preference in international flying rights after privatization

Air India, which was acquired by Tata Sons in January, will no longer enjoy priority in the allocation of international flying rights under India’s bilateral agreements with other countries, according to reports. All Indian carriers will now be treated on the same footing, The Times of India reported.

In a revised set of guidelines issued on April 19, the Directorate General of Civil Aviation (DGCA) dropped the clause which gave the former state-owned airline an advantage over other private airlines.

The clause, which has been removed from the set of guidelines, said, “Due consideration shall be given to operational plans submitted by Air India before allocation of the traffic rights to other eligible applicants.”

The DGCA has revised the guidelines regarding an airline’s eligibility to apply for traffic rights on international routes, procedure for allocation, utilisation and penalties for not using the rights.

“This is a positive step,” an executive of a private airline was quoted as saying by the Business Standard.

India has bilateral air service agreements with 121 countries and separate agreements with Dubai, Abu Dhabi, Sharjah and Ras Al-Khaimah. These agreements determine the number of flights per week, seats and destinations that airlines can operate between two countries. Airlines have to request the government for these entitlements.

Earlier, when private airlines used to approach the civil aviation ministry to add a flight on an international route, consent was to be first taken from Air India, if it wanted to operate on the route.

This process did not just delay the allocation, but also led to under-utilisation of flying rights at the cost of those who could have done so, the ToI report added, quoting a source.

The demand for international flying rights is going to increase with the Tatas planning to add more foreign routes and IndiGo planning a major international expansion from mid-2024.

Ace investor Rakesh Jhunjhunwala’s entry into the aviation sector with Akash Air is also likely to heat up competition in the space. Akash Air is expected to have a fleet of 20 aircraft by next year, following which it will seek international flying rights.