NEW DELHI - Consider this: An estimated 1.5 million
passengers travel between the United States and India per
year, but barring a Delta flight to Mumbai, no US
airline operates a direct service to India, while there
are 20 non-stop services daily to China, 13 to South
Korea and an average of 51 to Japan.
From the
Indian side, Air-India, the government-owned flagship
airline, is the sole carrier designated to operate
flights to the US and flies to New York, Newark, Chicago
and Los Angeles. Most flights to and from the US are
booked 85% all year, ferrying tourists, students,
technology professionals and multinational executives.
As things stand, even if a US airline wants
to increase the number of flights, it cannot, because of
an agreement between the two countries dating back more than 50
years. Under this bilateral agreement, the US cannot
increase the number of flights unless there is a
corresponding increase by a "designated'' Indian
operator (Air-India) by the Indian government, so that
revenues are equally shared. Indian private airlines are
not allowed to fly to the US as the government wants to
retain Air-India's monopoly.
The Indian
government also does not allow more aircraft from the US
to fly as it cannot fill up the routes thus created
because Air-India does not have enough planes in its
fleet to match. It has now only 23 services every week
to the US. The acquisition for new aircraft for
Air-India is mired in red tape, the process dragging on
for years now.
The existing agreement between
India and the US also allows only designated carriers to
specific points - while Air-India can touch New York,
Chicago, San Francisco and Los Angeles, US airlines can
operate to only Delhi, Chennai, Kolkata and Mumbai. The
result is that neither can US airlines fly more aircraft
to meet the growing passenger demand, nor is Air-India
in a position to meet the requirement.
The
winter months from October to February are when
non-resident Indians (more than 2 million in the US)
come home to holiday, marry and invest. This is the
tourist season as well, and tickets are invariably hard to
come by because of the artificial scarcity. Many
passengers thus choose to fly first to neighboring destinations
in Sri Lanka, Southeast Asia or the Persian Gulf before catching
a flight to India. This has resulted in a loss of
business to Air-India.
The
process is cumbersome and involves a loss in productivity and
time. But most prefer it this way as flights from the US
to India are exorbitantly priced because of lack of competition,
standing at almost double the rates across similar distances
in the rest of the world. Several US airlines
also piggyback other international majors, such as
Air France, Lufthansa and KLM, which have
bilateral agreements in place with Air-India.
Last year, the Indian government's decision to
follow a limited-time open-sky policy (for three months
beginning November) resulted in international airlines adding
more than 260,000 seats on their flights to and
from India. The government is likely to follow a similar
process this year wherein all international airlines
will be allowed to operate any number of flights to
India between November and February. Experts, however,
say the current approach is slipshod and half-hearted.
But matters could change further in
the near future because of pressure from the US, as well as
the keenness of the Indian government to ease controls
to pursue a genuinely more open-sky policy. "The government
has decided to sign a plethora of new bilaterals in
regions spanning the Middle East, Europe and the US,
which would throw open more capacities on these routes.
The Aviation Ministry has identified the Middle East,
pockets in Europe such as the UK and Germany, and the US
for entering into new bilaterals,'' Civil Aviation
Minister Praful Patel has said. "With Indian private
airlines' [Jet Airways and Sahara] flights to Southeast
Asia scheduled to open up, that part of the world would
automatically be taken care of," he added.
The
US government has handed a detailed proposal listing
far-reaching features of a new bilateral agreement, the
first of its kind being considered by India. The US
offer is wide-ranging: from letting any airline -
regardless of whether it has been designated a national
carrier or not - carry out services between the two
countries to lifting all bars on type of aircraft and
number of cities, the proposal lists a slew of measures
that will completely transform the relationship in this
sector between India and the US.
Washington has conveyed the
need to ensure that other airlines do not benefit from
the surge in passenger rush (more than 3 million last
year, though this is still far lower than competitor
Thailand, which is targeting 12 million tourists
this year). The US has such agreements with more
than 60 countries and feels that its existing bilateral
agreement with India is outdated and needs to be
replaced immediately for air services to improve between
the two countries.
Last month, US
assistant secretary of transportation for aviation Karan
Bhatia hinted at the possibility of US airlines entering
partnerships with domestic Indian carriers. He pointed
out that a new agreement is necessary for this because
the present arrangement rules out any such partnerships.
However, the easing of flying to India
through the year can only happen if the government is able
to increase the fleet of Air-India. Expressing concern
over the delay in fleet acquisition by Air-India and
Indian Airlines, a parliamentary committee recently said
this has forced the global carrier to sell
bilateral agreements to foreign airlines, leading to a decline
in its market share. Observing that an atmosphere
of uncertainty prevails because of the confusion in
the government on fleet-acquisition plans, the standing
committee on transport, tourism and culture said the
delay cost Air-India 10-20% of its market share.
A long-term solution can only be
found if elements of the Naresh Chandra committee are
studied for an overhaul of the Indian civil-aviation sector.
The panel had suggested privatization of Air-India
and Indian Airlines and a hike in foreign direct
investment to 49%, a move resisted by the left - a key
coalition ally of the ruling Congress Party. The panel had
also endorsed the government's open-sky policy, allowing all
private domestic carriers to fly some international
routes. A complete implementation of proposals put
forward by the committee is the only way the government
can ensure better air travel for Indians, at home and
abroad.
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