- Air India wants government to roll back traffic rights given to Gulf carriers to protect domestic airlines
- National carrier has recommended suspension of traffic rights to Gulf carriers temporarily till 2021-end
- Since bilateral traffic rights are signed between two sovereign nations, they cannot be withdrawn or suspended unilaterally
- Not giving access to foreign carriers is important for Air India to retain market share
Air India has urged the Indian government to suspend part of the air traffic rights granted to Gulf countries, especially United Arab Emirates (UAE), Qatar and Oman. Air India fears Gulf carriers could resort to predatory pricing once travel restrictions are lifted and eat out their share on long-haul routes such as India-Europe, India-US and India-UK.
The airline has informed the government that the COVID-19 pandemic has made Indian carriers vulnerable, and they are not in a position to compete with cash-rich Gulf carriers, sources say. "Air India wants the government to limit Gulf carriers' access to only few metro cities and reduce frequency at least till 2021-end," top sources told BusinessToday.In.
But since bilateral traffic rights are signed between two sovereign nations, they cannot be withdrawn or suspended unilaterally. Air India has therefore suggested the government to invoke force majeure. A former bureaucrat who held key position in Civil Aviation Ministry threw light on the matter saying that international treaties are governed by the provisions of the (United Nations) Convention on the Law of Treaties.
"It will have to be seen if there is enabling provision in the ASAs for curtailing traffic rights in the event of pandemic or other extra ordinary situations. For revisiting an international agreement, a contracting party would have to go by the Convention on the Law of Treaties. But any law-abiding country would think twice before revisiting any international agreement," the official said.
He added it would be difficult for Air India to find favour with the government on the proposal. Air India's has come in the wake of a row between India and Germany over traffic rights to Lufthansa. In a move that forced Lufthansa to cancel its flights to and from India, the Indian civil aviation authorities rejected the German carrier's schedule to operate 20 flights a week.
"There are restrictions in place for Indian nationals desiring to travel to Germany which was putting Indian carriers at a significant disadvantage resulting in inequitable distribution of traffic in favour of Lufthansa. As against Indian carriers operating 3-4 flights a week, Lufthansa operated 20 flights a week. In spite of this disparity we offered to clear 7 flights a week for Lufthansa which was not accepted by them," Indian aviation regulator Directorate General of Civil Aviation (DGCA) said in a statement following the row last month.
Besides Gulf carriers, Air India has reservations against other foreign carriers also getting pre-COVID level access to Indian market. They have been opposed to carriers like Lufthansa, Singapore Airlines and Emirates flying Indian passengers to various US and European destinations using the '6th freedom' rights.
The 6th freedom rights allows a foreign carrier to fly passengers from one country to another while stopping in its own country. Airlines such as Emirates and Qatar Airways onboard passengers in India and then take them to their destinations in Europe and the US while making a stop over at their hubs in Dubai and Doha, respectively. Air India has often complained about the matter as it badly hurts the national carrier's international market share. Most of the Gulf and Middle-East carriers use India as a source market to feed their long-haul flights to the US, Europe and Australia. As per industry estimate, Indian flyers account for nearly 30% of the Gulf carriers' onward traffic to the US.
In an earlier report, aviation advisory Centre for Asia Pacific Aviation (CAPA) had estimated that India accounts for nearly 36% of Emirates and Etihad's traffic to the US. Nearly 28% passengers booked by Qatar Airways in India were flown to the US. With foreign carriers permitted to operate flights to tier-II Indian towns, Indian carriers have gradually been pushed to a disadvantageous position.
In fact, the government has put a brake on negotiating traffic rights with many countries to fight this problem that plagues Indian carriers. An Air India insider said that not giving access to foreign carriers is important for the survival of India's airlines. "While government is giving financial support to Air India on one hand, it should not follow a policy that will favour foreign carriers at the cost of national airline," he said.
India suspended scheduled international flights in the last week of March due to coronavirus outbreak. A little over a month later, the Vande Bharat mission was launched to bring back stranded Indians on special flights. Now, the government has air bubble pacts with some countries under which flights are operating.