Saturday, August 12, 2017

‘Ease norms for airlines to fly abroad’

New Delhi: The Economic Survey has suggested a mix of protectionism for domestic airlines and liberal norms for flying abroad to bolster their share in international air traffic.

The second volume of the Economic Survey 2016-17 released on Friday said a large increase in capacity entitlements under bilateral air service agreements with foreign countries has helped foreign carriers in gaining a large share in the international traffic to and from India as domestic carriers have underutilised their rights.

About 38% people fly in and out of India through Indian carriers as per estimates for January-March 2017.

“Indian domestic airlines have a very low share in international traffic to and from India,” the Survey said. “Factors like foreign airlines utilising the sixth freedom of the air, expansion of capacity entitlements under bilateral air service agreements with foreign countries, lower utilisation of India’s own capacity entitlements, the 0/20 rule and fleet constraints are responsible for the same.”

Sixth freedom is the bilateral air traffic right to fly from a foreign country to another foreign country while stopping in one’s own country. For instance, Emirates operates flights between India and the U.K. while stopping at Dubai, its home state. Sixth freedom traffic constituted 61.14% of the total international traffic in 2015-16, increasing from 59.15% in 2014-15. The Survey said this had reduced the share of direct, long-haul flights for Indian carriers from 25% in 2011-12 to 20.5% in 2015-16.

The Survey said that the government should focus on building its own aviation hubs as “India is as advantageously placed in terms of geographic location as Dubai or Singapore.”

It noted that the capacity entitlements between Dubai and India have increased sixfold between 2003 and 2017. It increased ninefold in the case of Oman and 12-fold in the case of Qatar.
12/08/17 The Hindu

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