Airports want govt to let international carriers spread their wings and shed protectionist stance

Airports in India are pushing the government to shed its protectionist stance and grant more bilateral flying rights to foreign carriers as they are seeking to gain from an increase in international travellers, according to industry executives.

“In today’s increasingly complex economic landscape, we need the continuous support of governments to further liberalise air transportation and streamline visa policies across regions. These are proven drivers of economic development,” said Stefano Baronci, Director General of lobby group Airports Council International Asia-Pacific & Middle East. “In contrast, protectionist measures ultimately hinder progress and limit opportunity.”

International flying rights are allocated on a bilateral reciprocal basis. Since assuming power in 2014, successive governments led by Prime Minister Narendra Modi have taken a hawkish stance over extending flying rights to international airlines, primarily those from the Middle East.

This, the government said, was to protect Indian airlines and to convert airports into transit hubs like Dubai, Changi. In 2016, India in its National Civil Aviation Policy framed the guidelines saying that unless the utilisation from the Indian side reaches 80%, additional flying rights will not be granted.

“Increasing access and options for passengers are crucial aspects of transforming Indian airports into global hubs, and that should not just depend on when Indian airlines are ready to compete. The government is mindful of this as they are very open to suggestions,” said SGK Kishore, executive director (South) at GMR Airports. GMR owns Delhi and Hyderabad airports, as well as Goa’s second airport.

Paul Griffiths, CEO of Dubai Airport, said India has become the largest source market for the airport but growth is being severely curtailed due to the Indian government’s stance of not increasing flying rights to Dubai-based airlines like Emirates and Flydubai.

“The problem is when you try to protect something, I would argue you cause more damage to the economy. Other countries have attempted this like Canada, where they have tried to restrict the capacity, and that led to consumers ending up paying significantly higher prices,” Griffiths said in an interview.

“The right way round is to concentrate on making the airlines. It would be beneficial for India’s economy and passengers if they liberalise access between India and UAE,” he said.

The issue of international flying rights has become a flash point among airlines too. Air India CEO Campbell Wilson has called for limiting market access for foreign carriers.

“Indian carriers have recently ordered more than 1,000 aircraft. We have an appetite for more. We are committing to that on the basis that there would be an economic return to that investment, which, if you add it all, is well over $100 billion. If the rug is pulled out from under us, and if we can't fly those aircraft, we will not take those planes,” said Wilson.

Rivals IndiGo and Akasa are, however, not in favour of Air India since they themselves want to expand further internationally.