Government to review UAE bilateral deals

Source :  The Economic Times

NEW DELHI: The government is examining one of the most controversial decisions of UPA -treating the member emirates of United Arab Emirates (UAE) like Dubai and Abu Dhabi -as separate entities for purpose of granting flying rights to India. Bilateral agreements are between two countries which determine the number of seats airlines of each side will operate to the other and also the number of cities they will be allowed to fly to.

However, UAE is the only country with which India has separate bilaterals, or agreements granting flying rights, with individual emirates.

The aviation ministry has started the process of moving from the ad hoc approach to increase bilateral with different countries to a comprehensive strategy that protects the interests of Indian carriers without hurting consumers in any way . This will include examining whether India should have bilaterals with UAE as a whole, one country , or with  its individual member states.

Union minister of state for civil aviation minister Jayant Sinha has called Indian carriers to give their views on this issue on Thursday . This will be followed by meetings with other stakeholders and ministries like MEA.

Giving the reason for this rethink, a senior official said foreign carriers have a twothird share in all the international travel to and from India as of now and previous governments gave access to a large number of cities in India. A majority of international travel between India and abroad happens through nearby hubs in the Gulf and southeast Asia.

“We are investing billions of dollars on Indian airports and must have a strategic policy that allows our airlines to directly take the traffic to and from India like Lufthansa does in Germany; BA in London; Singapore Airlines in Singapore and so on. For Indian airports to become hub, we need the right policy for bilateral.Why should traffic meant to and from India fill up nearby hubs abroad for taking transit flights from there? Our airlines must increasingly do that job with the help of right  policies,“ said the official.

However, doing a balancing act may not be easy for the government. Opening of the Indian market to foreign airlines led to drop in fares due to increased competition.Also, at present only two Indian carriers -Air India and Jet -fly on long-haul international routes to places like North America and Australia. Vistara plans to do so in coming years. And our low cost carriers -IndiGo and SpiceJet -fly only to neighbouring countries as per the range of their narrow bay planes. GoAir plans to start overseas flights on similar routes soon and SpiceJet is looking at long-haul budget flights.

Last year saw 5.3 crore people flying in and out of India.International traffic is growing at a constant 10%, which means India needs a mix of both its own and foreign carriers to fulfil the requirement. It remains to be seen what kind of balance the government strikes between meeting peoples’ requirement for overseas travel at affordable fares and protecting interests of Indian carriers.

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