SME Times News Bureau | 14 Feb, 2012

The Indian government Tuesday allowed domestic private airlines to expand their overseas operations by using the maximum permissible limits of bilateral flying rights.

So far, only Air India enjoyed the right to fly on international routes agreed between India and foreign countries through bilateral air service agreements (ASAs).

Tuesday's decision freed up flying rights on the under-utilised routes reserved for the national flag carrier.

"Indian scheduled carriers, including Air India, can utilise the allocated bilateral till such time they reach the maximum permissible limit under air service agreements," the civil aviation ministry said.

Indian carriers utilised just 20 percent of their overseas entitlement, against 39 percent into India by foreign airlines between January to November 2011.

The share of passenger market emanating out of and into India varies from sectors to sector.

Indian airlines use less than 10 percent of the allowed capacity in Europe, and the rest is being utilised by foreign carriers.

In the Far East markets, the numbers are around 40 percent with domestic carrier and 60 percent with foreign carriers.

The ministry, however, said that Air India's interests and operational plan will be given due consideration in allocation of the traffic rights and entitlements.

Air India on its part said its international operations or revenue generation would not be affected as it is utilising most of its slots under the current flight plans.

"We cannot fly out to every country. The decision to withdraw the right to first refusal will not affect us so much because we are utilising most of our slots," a senior Air India official said.

According to the official, the flying slots to African countries, Commonwealth of Independent States (CIS) in Central Asia and some markets in the Far East may be given to private airlines.

The ministry said the allocation of traffic rights will be given after considering factors like demand, capacity and capability of the airlines to operate the flights.

"In order to promote travel, trade and commerce needs of India with countries where no ASAs (air service agreements) exist, the government will consider creation of bilateral traffic rights through ASAs," it said.

"All possible steps will be undertaken to promote the development of the hub to enable Indian carriers to carry 6th freedom traffic and attain a dominating position in the region."

Sixth freedom is a flying right which allows airlines to carry passengers or cargo from a second country to a third country by stopping in the one's own country.