Lufthansa welcomes open skies policy

Policy will allow European carriers to expand network and frequencies in India and compete with Gulf carriers

Foreign airlines have welcomed the civil aviation ministry's open-sky proposal to encourage more flights to India.

In its draft civil aviation policy, the ministry has proposed open skies in a phased manner, with plans for reciprocal agreements with countries in South Asia and those beyond 5,000 km in the first phase.

This would allow European carriers to expand their network and frequencies in India and enable them to compete with the Gulf carriers which have emerged as a strong competiton in the last few years.

"We welcome the announcement by the civil aviation ministry regarding open sky policy. These steps will provide the right kind of boost to the domestic sector which will eventually drive the larger aviation eco-system in India. We believe that an open sky policy will encourage a healthy and competitive environment for the industry, something we have always advocated for the overall growth of the industry," said Wolfgang Will, Director (South Asia), Lufthansa.

Emirates said it supports the Indian government's 2020 targets of becoming the world's third largest aviation market and reaching 85 million international passengers a year

"India is an extremely important market for Emirates and we will continue to adapt and contribute to the growth of the aviation market in India," said Essa Sulaiman Ahmad, Vice President-India, Emirates.

Singapore Airlines declined comment stating that the civil aviation policy was being discussed by Indian and Singapore governments.

The government has expressed intent to adopt an open sky policy with all countries in the world from April 2020. The civil aviation ministry said it would examine increasing the foreign direct investment cap from 49 per cent if it decided to implement open sky with all countries, including those within 5,000 km range.

To begin with, the policy proposes to liberalise air traffic rights with Saarc and countries beyond 5,000 km on a reciprocal basis. This would include countries in Europe, Africa, Australia and the Americas

 

The ministry has also proposed auction of additional rights beyond the existing rights to countries within 5,000 km. Bidding will be introduced if domestic airlines have not fully utilised their quota.

At present, India has an open sky agreement with the US and a nearly open sky deal with the UK.

 

Open sky beyond 5,000-km, even without any restrictions, will have very limited or no impact as there is very low demand for additional bilaterals on these routes, said Kapil Kaul, chief executive officer, South Asia, Centre for Asia Pacific Aviation.

Kaul added that European carriers had unused bilaterals and there was scope for limited growth on these routes." Further, carriers in Latin America, Africa and Australia were unlikely to show interest, he said.