'Open sky' policy to hit A-I, IA earnings

The announcement of 'open sky' policy for designated airlines of ten ASEAN nations to fly unhindered into the Indian cities is likely to hit the earnings of Air-India and Indian Airlines, official sources said in New Delhi on Friday.

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However, in order to prevent any adverse impact on the revenue of Air-India earned through bilateral air traffic rights, the government has allowed the airlines of these Southeast Asian nations to operate freely to certain places like Goa, Kochi, Amritsar, Gaya and Khajuraho, the sources said.

These foreign carriers would however not be allowed to use the 'open sky' policy for metro cities, the sources said.

They replied in the affirmative when asked whether these airlines would be allowed to take the benefit of the policy when it is announced by the government for all other carriers as has been the past practice during the peak winter season.

While only three ASEAN nations operated their flights to India, both Air-India and Indian Airlines would face heightened competition if these carriers were allowed to operate to the comparatively smaller but important tourist destinations, industry sources said.

Air-India earns revenue through the bilaterals if it does not operate to the countries with which the agreements have been signed by the government. The designated carriers of these nations have to enter into a commercial arrangement with Air-India for carrying out their India operations.