In yet another boost for India's loss-making domestic carriers, the government has decided to end the monopoly of the state-owned Air India (AI) over international flying rights.
The national carrier traditionally has had first and exclusive right (right of first refusal) to all foreign routes or bilaterals signed between India and other countries. Only if AI refused could a private airline stake a claim for a route.
"In most cases, it was found that AI would hold on to the routes on some pretext. As a result, several routes and flying slots remained unutilised," a ministry official said.
The decision comes as yet another shot in the arm for the country's debt-laden airlines. A group of ministers had recently cleared 49% foreign direct investment by foreign airlines, and the government permitted direct import of jet fuel by domestic airlines.
"Under the new arrangement, code share operations will be encouraged. All possible steps will be undertaken to promote the development of the hub to enable Indian carriers to attain a dominating position in the region," the aviation ministry said.
"AI's operational plan will receive due consideration in allocation of the traffic rights and entitlements. The allocation of the traffic rights to Indian scheduled carriers shall be done well in advance up to a maximum limit of five schedules keeping in mind the demands from them, their capacities and capabilities, operational plans and other relevant factors," the ministry said.