Modifie a biltarelism

A Case Study For India
Presented By: Shonit Nayan
Under the guidance of My Guide :
Deepthi Mary Mathew
CPPR Kochi,Kerala

1. Aviation Bilateralism: An Introduction(Common Provisions)
2. Freedoms of the Air
3. Looking Aviation Bilateral From India’s Point of Views
4. Some examples of BASAs (India and other country)
5. Scanning the Aviation Bilateral
6. Talking About Sixth Freedom Carriage
7. Underutilized performance by AIL
8. NCAP 2016
1/4/2018CPPR Kochi 2

9 Challenges before BASAs
10 Queries (if any)

 Before an airline can operate international services to another
country, the government must negotiate a treaty level agreement
with the destination country's government. These treaties are
known as Bilateral Air Services Agreements(or BASAs).
 Why important ? : Who/How/Where an A/L can fly & bringing the
world together
 Recognition of Air Sovereignty : ICAO(“International Civil Aviation
Organization”)based in Montreal, Canada// A UN body // operates
on the Rules established by the Convention on International Civil
Aviation, popularly known as Chicago Convention held in
1944.(Except : Liechtenstein,Dominica,Tuvalu)

In general aviation bilateral share some common provisions which
can be highlighted as follows :-
 Traffic rights (Freedoms of the Air)
 Capacity (Number of flights,passengers,frieght)
 Designation, Ownership and Control
 Tariffs
 Others clauses addressing competition policy,safety,security

 Predetermined/Bermuda (Generally single desig.,ltd routes,)
 Point to point Open Skies (or PoS – Multi desig.,free access to
design. Routes, specific points, unrestricted depart. Or arrival
points, no frequency and capacity constraint, extensive 5th FRs )
 Multiple Point OS(MoS) : multi desig. , any route b/w 2 States, no
capacity/freq constraints, Unrestricted 5th FRs

 Fundamental rights of aviation//Set of commercial aviation
rights// An entry card to another country’s airspace. Evolved :
post disagreements over the extent of aviation liberalization
in the Chicago Convention.
 As framework for AB
 Each FoA : Varying Degree of Acceptance
 Sovereign Territory//No International line of separation b/w
sovereign airspace & space//19 miles(30km) -99miles(160
km)//50miles(80km)>astronaut as per USA,
 Communicate with ATC// Overflight fees/OFF: no landing or take
off only using ATC//OFF-universal // $56.86 for 100 nmi(185 km)
charges by USA

 First Freedom of the Air - the right or privilege, in respect of
scheduled international air services, granted by one State to another
State or States to fly across its territory without landing (also known as
a First Freedom Right). Except : EU airspace(100 unsafe A/L like
Pamir a/l,Safi a/ways,Aerojet(Ro Angola) so on…
 Second Freedom of the Air - the right or privilege, in respect of
scheduled international air services, granted by one State to
another State or States to land in its territory for non-traffic
purposes (also known as a Second Freedom Right).
However it rarely need for modern days A/Cs .USSR(No fly
zone:cold war era)

 Third Freedom of The Air - the right or privilege, in respect of
another State to put down, in the territory of the first State, traffic
coming from the home State of the carrier (also known as a Third
Freedom Right).
 Fourth Freedom of The Air - the right or privilege, in respect of
another State to take on, in the territory of the first State, traffic
destined for the home State of the carrier (also known as a Fourth
Freedom Right).

 Fifth Freedom of The Air - the right or privilege, in respect of
scheduled international air services, to fly between two foreign
countries on a flight originating or ending in one's own
country.(also known as a Fifth Freedom Right).
 Similar to 2nd FoA // 2nd & 5th FoA often but not always granted
simultaneously
e.g - Air India flight (New York-London-Hyderabad)
 ICAO characterizes all “freedoms” beyond the Fifth as “so-called”
because only the first five “freedoms” have been officially
recognized as such by international treaty.

 Sixth Freedom of The Air - the right or privilege, in
respect of scheduled international air services, to fly
from a foreign country to another while stopping in one's
own country.
 Seventh Freedom of The Air - the right or privilege, in
respect of scheduled international air services, to fly
between two foreign countries while not offering flights to
one's own country .

 Eighth Freedom of The Air - the right or privilege, in
respect of scheduled international air services, fly inside
a foreign country, continuing to one's own country .
 Ninth Freedom of The Air - the right or privilege to fly
inside a foreign country without continuing to one's own
country. Rarely given except in EU
e.g-Ryanair (An Irish A/L allowed to fly b/w- Paris-
Lyon,Edinburg-London,)Paris-Berlin,
Norway not part of EU but its airlines regd in several EU single
aviation market

 As on March 2016, MoCA had signed bilateral agreements with 109
countries. Indian carriers operated in 36 of these countries with AIL
having operations in 33 countries. Airlines of 48 countries operated in
India.
 Regulators involved in Indian Civil Aviation Sector :
 DGCA (till 1994 –every aspects of flying controller)
 AAI (1994 Parliamentary Act- power to manage all national and
international (15) airports
 AERA-2008 (tarrifs,other aeronautical charges)
 BCAS safety functions

 UAE (Dubai)

 However all these bilateral agreements came under scanner of the
constitutional watchdog CAG(Art.148) and in its Report No. 18 of
2011 titled as “Performance Audit Report on Civil Aviation in India”
 Significant extent of 6th freedom carriage from/to India by foreign
carriers as compared to “point to point” passengers. It was
suggested that till India had its own effective and efficient hubs and
Air India/other Indian carriers were able to exploit them effectively,
entitlements for airlines/countries predominantly dependent on 6th
freedom traffic (notably Dubai, Bahrain and other Gulf countries in
the first instance) should be strictly frozen by MoCA if possible,
subject to diplomatic and other considerations.

 Enhancements in bilateral entitlements between
India and foreign countries had resulted in seat
capacity allowed in the bilateral agreements
significantly exceeding the “point-to-point”
passenger traffic requirements between the two
destinations

 MoCA replied (02 February 2016) that the current winter schedule
2015-16 showed that there was a big gap in utilization of the
entitlement by the designated carriers of the two sides. While
Ethiad was using about 46000 seats per week, the Indian carriers
were using only about 19000 seats per week. MoCA also stated
that this fact would certainly be kept in view while considering any
proposal for further increase in entitlements in future.
 The utilization of allocations by Air India/Air India Express was ‘nil’
for seven destinations i.e. Canada, Bangladesh, Iraq, Kenya,
Malaysia, Thailand, Sri Lanka. The utilization was less than 50
percent of bilateral entitlements in respect of Abu Dhabi,Bahrain,
Kuwait, Russia and Singapore.

 Issue of Slot (permission given by a coordinator for a planned
operation to use the full range of airport infrastructure necessary to
arrive or depart)Management –”SAS”(AAI,DGCA a/c to IATA
Guildelines-7.1.1 Sectn e );
 SlotAllocationCommittee[ExeDirAAI,DGCARepresentative,BCAS,De
pt(Customs,Immigration,Defense) ]
 “Grandfathering of slots(controlled by service provider on
perpetuity basis i.e. endless duration),
 Principle of “use it or lose it” (merger)
o Drawbacks : ltd scope for new entrants//underutilized slots
 Welcoming solns(based on exp. of USA,UK,EU) : Slots trading //
Incentive package to A/Ps to expand/improve A/Ps infrastructure

 Absence of a level playing field between national career Air India
Ltd. Other private players
 AIC No. 08/2009 & Air Corporation Act-1953- gives preferential
treatment to NACIL<AI+IA> w.r.t air traffic rights & access to GoI
funding.
 AIL(Right to first refusal)
 AIL(No of international routes share- N. America-7,Europe-
9,Gulf-12,Middle East-2,Africa-2,West Asia & Asia-13)
o Drawbacks : Tougher operational & financial costs for other pvt.
Players (Jet Airways, Sahara …)

 Hard and tough sets of competition from foreign players in the
aviation market
 Around 72 foreign A/Ls fly in/out of Ind
 Increase incapacity entitlements by GoI for international carriers :
approx 4 fold(2004-10), however Indian carriers can’t able to take
benefit but foreign one like Emirates benefitted from the same (Open
Sky policy)
 Recomm. –Adopt policy like prevalent in US,EU
In USA-ATR+US Airport rules+Safety (to operate internationally)
EU-2 yrs operational history
As per Naresh Chandra’s committee recommendations- Replace equity
requirements with carrier service, also to remove-
fleet,equity,experience requirements for international career service

National Civil Aviation Policy- 2016
 Replacing 5/20(AIC no. 08/2009 Sect. 2.1) Rule by 0/20-
In October 2004, the Union Cabinet stipulated that for Indian
carriers to fly abroad, they must fly on domestic routes for 5
years and have a fleet of 20 aircraft.
AIC-”Aeronautical Information Circular”

 All airlines can commence international operations provided
that they deploy 20 aircraft or 20% of total capacity (in term of
average number of seats on all departures put together),
whichever is higher for domestic operations.
 Stand on Bilateral Traffic Rights
Liberalizing the regime of bilateral rights,EoDB, wide
spectrum of choices to air passengers

 “Open Sky Agreement”
SAARC Nations, Countries with territory located entirely
beyond a 5000 km radius from New Delhi.

 Code-Share Agreement
 B/W(Marketing airline, Administrating airline)
 airline code and flight number of the marketing airlines
 Freedom to Indian carriers for domestic code-share
agreements with foreign carriers

? The decision of the government of the day to review all the bilateral
agreements done between years 2009 to 2013 or prior to it will be
reviewed on various scales and performance parameters. Whether
it will affect the Indian aviation sector particularly when the World is
looking towards India and China as the biggest market for aviation
in forthcoming years
? Whether the “principle of reciprocity” governing the BASAs and
also the guidelines set by the age old Chicago Convention are in
compatible with the present day bilateral agreements in the
booming sector of aviation

? What are the new factors emerged which guide the aviation
bilateralism and how India will resolve the effect on pockets
of its air passengers due to strict norms of bilateral
agreements and how it will address the need and request
made my foreign countries like UAE(Dubai),Abudhabi and
others to increase the present seats shares.
? Impact on Aviation bilateral agreements post GST(double
taxation, concerns over availing input tax credit, movement of spare
parts, global ticketing systems) regime
?Whether respective states should be given an opportunity to
engage with foreign nations directly depending upon the
passengers going from that particular state to that foreign
nation

 In addition to these you all present here are
welcome to raise your queries and question
regarding this presentation as I think it will make to
refine my research further.
 Also what are the welcoming solution you think for
these set of problems pertaining in Aviation Bilateral
?

Modifie a biltarelism

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