No level playing field in allocation of bilateral rights: Akasa Air to govt

Akasa Air has told the Civil Aviation Ministry that the allocation of bilateral rights does not provide a “level playing field”, denying new entrants like itself a “fair opportunity” to compete with established airlines. such as the Air India group and IndiGo.

 

Bilateral rights, negotiated between two countries, determine the number of flights allowed between them. Each government then allocates its share to its airlines.

 

In a letter dated January 16, 2025, Priya Mehra, chief of governance and strategic acquisitions at Akasa Air, told Aviation Secretary Vumlunmang Vualnam that ensuring an “equitable allocation” of rights, particularly for new entrants, is essential for fostering a competitive environment.

 

Today, IndiGo and the Air India group hold a strong presence in the UAE, operating multiple daily flights between points in India and Abu Dhabi, Dubai, Sharjah, and Ras Al Khaimah. You will agree that this reflects that there is no level playing field and presents a significant competitive challenge for a new entrant like Akasa Air. It denies us a fair opportunity to compete with airlines that already operate substantial volumes of flights between the two countries,” she wrote.

 

Business Standard has reviewed the letter. According to aviation analytics firm Cirium, Indian carriers operate a total of 1,274 flights per week between India and the UAE. Of these, approximately 49.3 per cent are operated by the Air India group and 37.8 per cent by IndiGo. The Air India group comprises Air India and its low-cost subsidiary, Air India Express. 

 

Responding to queries about the letter, Mehra told Business Standard: “At Akasa, we have always believed and emphasised that we are at this stage of our growth, both domestically and internationally, only because of the support and impetus we have received from the Ministry of Civil Aviation and other regulatory bodies. The ministry has always been very receptive to industry concerns, and we continue to work under their guidance and leadership.”

 

The Ministry of Civil Aviation, IndiGo, and Air India did not respond to queries from Business Standard on the matter.  

 

In her letter, Mehra stated that Akasa Air has been requesting rights for three destinations in the UAE — Dubai, Sharjah, and Abu Dhabi — for over a year. Specifically for Abu Dhabi, the airline has had “a few discussions” with ministry officials in recent months.

 

Following these discussions, Akasa Air decided to surrender its rights to six countries — Hong Kong, Kenya, Egypt, Ethiopia, Bangladesh, and Nepal — in exchange for additional rights for Abu Dhabi, she wrote.

 

However, during a meeting on January 15, Akasa Air was “surprised” to learn that the ministry had decided to shift the rights from the Abu Dhabi pool to other cities — Ras Al Khaimah and Sharjah —and subsequently allocate them to other Indian carriers.

 

Sir, this is what raises a few concerns. First, as far as we are aware, we have not seen provisions that permit such a shift, nor have we seen any precedents for this being done in the past. Second, even if we are mistaken in our understanding, there still remain unused rights in the pool, which should be allocated to us. Third, if such transfers are permitted under bilateral arrangements, we question why we were not allocated rights to Sharjah in the past through a similar shift of the pool,” she wrote.

 

She requested Vualnam to allocate rights for Abu Dhabi for use during the ongoing winter season and the upcoming summer season. “We will ensure that these rights are utilised within the shortest possible time frame required to mount additional flights,” she stated.

 

Additionally, if adequate traffic rights are available for Sharjah — following the recent shift of 2,500 weekly seats from the Abu Dhabi pool — she asked the ministry to consider reallocating these rights to Akasa Air. “We will once again ensure that these rights are utilised within the shortest possible time frame required to mount additional flights,” she wrote.