Bilateral rights issues in aviation sector

Reference

• Recently, there have been talks between India and the United Arab Emirates (UAE) about liberalising bilateral rights in the aviation sector. However, Air India CEO Campbell Wilson has sought to restrict market access for foreign airlines in the Indian aviation sector.
• Currently, there is a disagreement between Indian airlines and foreign airlines on the issue of more bilateral rights for Gulf countries.

What are Bilateral Rights?  

• Bilateral rights are a set of commercial aviation rights that grant airlines of one country the privilege of entering the airspace of another country.
• These rights are established by bilateral air services agreements between two countries.
  • Bilateral air services agreements are treaties between two countries that permit international commercial air transport services between their territories.
• When a government grants bilateral traffic rights to an airline, it fixes a number of seats or flights that the airline can operate.
• Sovereignty over the airspace above a country's geographical territory is recognized according to the standards of the International Civil Aviation Organization (ICAO).
• India currently has bilateral rights aviation agreements with 116 countries, covering aspects related to number of flights, seats, landing points and permitted code shares.

Related issues and companies' side

Airlines are divided on whether the Indian government should grant more bilateral rights to West Asian countries?

Indian companies' side

• Air India and SpiceJet have opposed giving more bilateral rights to West Asian countries, saying the government should focus on developing major Indian airports as hubs and a decision in this regard should be taken after a holistic analysis.
• Air India Airlines says that granting more bilateral rights to some Gulf countries will hamper its long-haul and ultra-long-haul flights to places like North America and Europe.
• According to Air India, if the central government provides more bilateral rights to hubs (countries) in West Asia under bilateral agreements, which hinders 'non-stop' international travel for Indians, then Air India will not invest in purchasing new aircraft including widebodies.
  • For example, if a passenger named 'A' books a ticket from India to America, but he has to fly from India to UAE and then from UAE to America, then UAE will get the benefit.

Foreign companies' side

• West Asian airlines such as Emirates and Qatar Airways are asking India to extend bilateral rights so that they can operate more flights to and from India.
• Qatar and the United Arab Emirates have sought an increase in bilateral air traffic rights from India as their airlines have used up their quotas halfway through the year.
• According to data from aviation analytics firm Cirium, more than 70% of passengers travelling on India-bound Emirates, Etihad and Qatar Airways flights in February 2024 this year used the airline hubs in Dubai, Abu Dhabi and Doha as transit points for travel between India and third countries.

Way Forward

• It is important for India to focus on making its own hub as foreign companies are only promoting their own economy and their own business hubs but not the Indian economy.
• But India does a lot of trade with West Asian countries like Saudi Arabia, UAE, Qatar, Kuwait, Bahrain and air travel is essential for this. That is why bilateral rights should be addressed in a 'holistic manner'.
• The government should ensure that Indian hubs are not located in West Asia or South-East Asia.
• All airlines should also ensure that Delhi, Mumbai, Bengaluru and Hyderabad become hubs of air trade and add to the traffic that currently goes through Dubai, Abu Dhabi and Singapore.

Conclusion

India should not take a one-size-fits-all approach to bilateral rights for all countries. It depends on the current state of trade, diplomatic and other matters between different countries. Therefore, a more detailed and multi-faceted approach is needed before taking a decision on this.