Auctioning of flying rights gets MEA backing

Incumbent airlines oppose the proposal

The civil aviation ministry has decided to stick to its original proposal of auctioning international flying rights out of major Indian airports to foreign carriers, despite stiff opposition from incumbent airlines. The proposal got the backing of the ministry of external affairs (MEA) during inter-ministerial consultations over the draft civil aviation policy.

“We've decided to retain the original proposal of auctioning rights. We have not faced any opposition over it from the MEA," said a top aviation ministry official.

Major airlines, including IndiGo, SpiceJet, Jet Airways and Go Air, through the Federation of Indian Airlines (FIA) had severely opposed the proposal saying it is akin to handing over the sovereign rights of a nation.

FIA told the ministry: “The proposal to auction seats to countries within 5,000 km is also impractical, untenable and unworkable as bilateral rights are sovereign rights of the country, to be utilised by the designated carriers of that country only. They are not purposed to generate transaction values with foreign carriers.”

However, the  aviation ministry is of the view that there is a mismatch between demand and supply in some routes as  Indian carriers are not utilising their seats properly. “If there is passenger demand, it is the government’s duty to make the seats available,” said another official in the aviation ministry.

According to procedure, the policy, after being drafted by the ministry, is sent for inter-ministerial consultations, following which it is sent to the Cabinet for approval. “The suggestions from other ministries have come and we will be sending it to the Cabinet in 10 days,” Civil Aviation Secretary Rajiv Nayan Choubey told Business Standard.

The government announced giving foreign airlines traffic rights to key destinations within seven hours of flying away from India (Gulf region, West Asia and southeast Asia) through auction as one of the ways. At present, countries sign an agreement to decide the flights or seats per week that can fly into each other's country.

In its initial draft policy released in October 2015, the civil aviation ministry proposed: “For short-haul countries partly or fully within 5,000-km radius, where domestic airlines have not fully utilised their quota, additional seats above existing bilateral rights would be allotted by bidding out these rights for a three-year period, without requiring reciprocity, the proceeds of which will go to Regional Connectivity Fund.”
CONFLICT OF INTEREST

• Major airlines, including IndiGo, SpiceJet, Jet Airways and Go Air, through the lobby group Federation of Indian Airlines (FIA) had severely opposed the proposal
   
• They have said such a proposal is akin to handing over the sovereign rights of a nation
  

 

The civil aviation ministry is of the view that there is a mismatch between demand and supply in some routes as the Indian carriers are not utilising their seats properly
 

According to procedure, the policy, after being drafted by the ministry, is sent for inter-ministerial consultations, following which it is sent to the Cabinet for approval