Tuesday, June 25, 2013

Air pockets in bilateral agreements

The civil aviation ministry's policy on bilateral seat-sharing agreements with other governments flies in the face of logic and consistency. Here's why.
In May, it granted Abu Dhabi a four-fold increase in seat capacity over three years ostensibly to help Indian consumers and teach Indian carriers to compete.
In June, ministry officials said similar requests by other countries and their carriers, notably Dubai and Qatar (for Doha), to expand their capacity into India would be on hold till at least November or next year. The reason? To protect domestic Indian carriers!
The fact that the civil aviation ministry can use the same logic to expand seat-sharing agreements in one case and decline to do so in another acquires a different perspective if we consider a parallel development. The same days as India generously granted Abu Dhabi almost 40,000 additional seats, India's largest private airline Jet Airways announced that it had sold a 24 per cent stake to that emirates' national carrier, Etihad.
Civil Aviation Minister Ajit Singh was transparent in admitting that the expansion in seat capacity to Abu Dhabi was allowed to help an Indian carrier, Jet Airways, which wanted to expand capacity and use Abu Dhabi as a hub to fly to the US and Europe. At the same time, he admonished state-owned Air India, for whom West Asia is a big market, for complaining. He argued that Air India has very limited operations today on this route, so passengers would suffer if more seats were not available.
25/06/13 Surajeet Das Gupta/Business Standard