No clause in pact violated, Swiss airlines tells India

New Delhi: Switzerland has responded to a move by the Indian government to stop all services of Swiss International Airlines (Swiss) to and from India, saying that the airlines, held by Air Trust, is incorporated under the laws of of the Western European country and run mostly by its own nationals.
India had threatened to stop Swiss, which, as the designated airline of that country, “violated” a vital clause called the substantial ownership and effective control (SOEC), mandated under the bilateral air services agreement between the two countries.
Under the SOEC clause, the government has the right to designate one or more airlines. However, its substantial ownership and effective control should be vested in the party designating the airline (in this case, the Swiss government) or its citizens (the Swiss people). In the case of Swiss, a majority stake is with Lufthansa.
The Swiss aviation authorities have contended that Swiss met all the ownership requirement of the bilateral pact. They say they are satisfied with the present structure of the Swiss management and the board of directors, which guarantee that effective control of the airlines is mainly with nationals of Switzerland. Also, 100 per cent of the shares of Swiss since July 1, 2007, are —and remain — to be directly owned by a Air Trust. India has, for the past four years, accepted the ownership and control of Swiss, they point out, adding it continues to be so on Thursday.
23/09/11 Surajeet Das Gupta/Business Standard

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Categories: Foreign Sep 2011