New Delhi: Airlines in India planning to enter into passenger sharing alliances with global carriers will need to take prior permission from the Union government from now on.
The civil aviation ministry has made it mandatory for all carriers such as National Aviation Co. of India Ltd-run Air India, Jet Airways (India) Ltd and Kingfisher Airlines Ltd to seek approvals before entering any so-called code share agreements with international counterparts as any such agreement affects bilateral air traffic rights between countries.
Code sharing refers to a ticket marketing practice among airlines that allows carriers to share the two characters in codes used in airline reservation systems. This helps customers purchase a single ticket on a journey that has two flights such as a New Delhi-London leg and a London-New York one on two different airlines.
On the radar: The new norms have been announced because such agreements affect bilateral air traffic rights between countries. Ramesh Pathania / Mint
For instance, such a partnership between Jet Airways and Air Canada allows a passenger to fly between Mumbai and London on a flight run by the Indian carrier and then on to various Canadian destinations such as Toronto, Vancouver, Calgary, Montreal and Edmonton on an Air Canada flight.
Passengers benefit by checking in baggage to their final destination and earn air miles on one or both carriers.
The new rules also mean that airlines will have to get a clearance from the government before entering into any global airline alliances such as Star Alliance, OneWorld or SkyTeam.
“It’s a procedure followed worldwide,” said a senior Air India official, who asked not to be named, while confirming the move. “We have always been asked to take prior approvals before entering into any commercial agreement but perhaps the government realized that in the past three-four years some new carriers have been allowed to operate (international flights) so it’s sort of clarificatory in nature, telling others to follow it too.”
In the US, such approvals are granted by that nation’s aviation regulator, Federal Aviation Administration.
Air India alone has a dozen code-share agreements including that with Deutsche Lufthansa AG, Singapore Airlines Ltd, Air France, Air Mauritius-KLM Group and OAO Aeroflot. It is also in the process of inducting itself into the biggest international airline grouping, Star Alliance.
Jet Airways has similar commercial agreements with Air Canada, All Nippon Airways Co. Ltd, American Airlines, Brussels Airlines, Etihad Airways, Qantas Airways Ltd and Singapore Airlines. It also signed a new agreement with Malaysian Airline System Bhd. this week and applied for a similar agreement with United Airlines Inc.
Kingfisher Airlines, which started international flights late last year, has Emirates, Air France, Qatar Airways, Northwest Airlines Corp. and Continental Airlines Inc. as its international partners.
An analyst said the move to make airlines seek approvals for tie-ups will help the government keep a check on both inbound and outbound carriers.
“It is an attempt to ascertain the airline’s flight operations status and also mitigate any possible anti-competition practices which can present an undue advantage to certain carriers operating on the same route,” said Mark Martin, an aviation analyst with KPMG’s India offices.
Most international airlines receive rights to fly to and from India on the basis of what are called bilateral rights between India and other countries. Carriers across the world are battling losses amid the global economic downturn.
“Based on the present global scenario with respect to the airline business, it becomes almost imperative that there exist a level playing field for all airlines, with none taking advantage of each other,” Martin said.