India set to ease restrictions on local carriers flying abroad
New Delhi – India could ease restrictions that prevent some of its domestic airlines from flying on international services within a month, potentially benefiting start-ups set up by Singapore Airlines and Malaysia’s AirAsia that aim to begin operations in 2014.
New Delhi is also considering a proposal to allow Airbus’s A380 planes to land at local airports, aviation minister Ajit Singh said .
India’s ban on A380s is mainly due to concerns that foreign carriers may further hurt state-run Air India by grabbing a larger share of international traffic.
Under existing rules, Indian carriers are also required to be in operation for at least five years and have 20 aircraft to be eligible to fly international routes.
Singh told reporters that New Delhi would seek the federal cabinet’s approval by next month to “scrap this rule”.
“At a macro level, this restores credibility to the Indian aviation sector,” said Amber Dubey, an aviation expert at consultancy KPMG, of the Indian government’s plans.
“It shows that the policy direction is always towards greater competition, the respect for logic, and being more aligned to global best practices,” he said.
Indian conglomerate Tata Sons has formed a joint venture with SIA to start up a full service carrier, which is expected to begin operations in the second half of 2014.
Tata is also an investor in AirAsia India, which is expected to compete in the Indian low-cost market from the second half of the year. Indian low-cost carrier GoAir, which began operations in 2005 but has fewer than 20 aircraft, could also be a beneficiary.
India’s overall air passenger traffic is expected to triple from 2010-20 to 452 million annually, as rising income levels help more people fly in the country of 1.25 billion.
Jan. 14 , 2014
