Air-India To See More Revenue Inflows Via Bilateral Right Fees

The Centre's decision to throw open Air India's unutilised bilateral rights to international airlines would result in additional revenues for the national carrier, civil aviation ministry sources said. Air India would be paid a royalty for these unutilised bilaterals, which "in monetary terms would be of a high order".

Although senior Air India officials declined to quantify the possible gains through such an arrangement, industry sources estimated that an efficient utilisation of these bilateral rights through third-party international airlines would result in hundreds of crores of rupees as additional annual revenues.

"When Air India utilises its unitilised rights by allowing another carrier to mount flights, it gains financially and the country gets an additionality without using its own planes," sources said.

Currently, fleet constraints limit the international operations of Air India and Indian Airlines -- India's two designated international airlines -- to just 33 countries, out of which 10 are under code share arrangements.

On the other hand, 51 designated airlines from 47 countries operate scheduled air services to India, the sources said. This means that AI and IA currently utilise less than 35 per cent of the 96 bilateral service agreements signed by India.

However, AI and IA will retain the option of retrieving the bilateral rights from the third-party operator on a particular sector, "as and when the Indian carriers are in a position to arrange aircraft and mount services. In the recent past, about one third of the capacity increase has been granted to the foreign authorities on such retrievable basis," the officials said.

The decision to throw open Air India's bilaterals to international carriers is also expected to reduce the cases of passengers being offloaded during peak load seasons, in spite of having confirmed tickets.

The ineffective utilisation of the country's bilateral rights so far resulted in congestion on the US, UK, Europe, the Gulf and other south east Asian countries, during peak seasons, when load factors exceeded even the 80 per cent level, thereby forcing the airline to offload passengers, the sources said.