Pvt car­ri­ers may get to fly lo­cal fliers on int’l flights

The priv­i­lege is cur­rently en­joyed by state-owned Air In­dia

Financial Chronicle - - FRONT PAGE - NIRBHAY KU­MAR

PRI­VATE air­lines like Jet Air­ways and Indi-Go may soon get to fly lo­cal pas­sen­gers on the do­mes­tic leg of their in­ter­na­tional flights, a priv­i­lege cur­rently en­joyed by state-owned Air In­dia. It means a Ban­ga­lore-Lon­don flight with stopover in Delhi could book pas­sen­gers for the Ban­ga­lore-Delhi sec­tor.

Be­fore lib­er­al­is­ing the rules, the avi­a­tion min­istry would dis­cuss the pro­posal with the home min­istry. The move will help air­lines strengthen op­er­a­tions on the pop­u­lar hub-and-spoke model un­der which car­ri­ers bring fly­ers from var­i­ous cities to its hub and then take them to on­ward jour­ney us­ing big­ger jets.

“Air­lines have sought per­mis­sion to op­er­ate in­ter­na­tional flights with car­riage of both do­mes­tic and in­ter­na­tional pas­sen­gers on the do­mes­tic leg. They have also asked for op­er­at­ing stand­alone do­mes­tic-cum-in­ter­na­tional flights us­ing ‘through flight num­bers.’ We would take up the mat­ter with the home min­istry,” an of­fi­cial said, quot­ing record­ings of a meet­ing.

The de­ci­sion was taken at a meet­ing chaired by avi­a­tion sec­re­tary RN Choubey on Au­gust 29. Sev­eral se­nior air­lines ex­ec­u­tives and air­port op­er­a­tors at­tended the meet­ing. Ac­cord­ing to in­dus­try sources, Jet Air­ways has been pitch­ing for this, as it would help pri­vate air­lines op­er­ate flights more ef­fi­ciently.

“The rea­son for not ex­tend­ing the ben­e­fit to all car­ri­ers has gen­er­ally been at­trib­uted to in­suf­fi­cient num­ber of cus­tom of­fi­cers who could board the plane that have both lo­cal and in­ter­na­tional pas­sen­gers,” an ex­ec­u­tive said.

Cus­tom of­fi­cials are re­quired to fly in a do­mes­tic­cum-in­ter­na­tional flight to en­sure that no il­le­gal ac­tiv­ity takes place on board.

To make things eas­ier, air­lines as­sign seat num­ber to pas­sen­gers in such a way that do­mes­tic and in­ter­na­tional pas­sen­gers are not mixed up.

Air In­dia has many flights that feed its in­ter­na­tional flights to long­haul des­ti­na­tions like Lon­don, New York and San Fran­cisco. Per­mis­sion to carry do­mes­tic pas­sen­gers in in­ter­na­tional flights help Air In­dia re­duce un­sold in­ven­tory, which is per­ish­able. It also im­proves av­er­age load fac­tor, pas­sen­ger flown per seat per km, lead­ing to bet­ter rev­enue.

“The re­lax­ation avail­able to Air In­dia should be avail­able to all air­lines,” an­other air­line ex­ec­u­tive said.

While ef­fort is on to lib­er­alise rules and reg­u­la­tions for the sec­tor, the gov­ern­ment is also in the process of di­vest­ing part or full of its stake in Air In­dia. The pro­posed move to al­low pri­vate car­ri­ers carry lo­cal pas­sen­gers on do­mes­tic leg of their in­ter­na­tional flights sig­nals that Air In­dia sell­off is not far away.

The gov­ern­ment has al­ready in­vited ini­tial bids for ap­point­ing trans­ac­tion and le­gal ad­vi­sors for dis­in­vest­ment of the na­tional car­rier.

In an ad­ver­tise­ment, the de­part­ment of in­vest­ment and pub­lic as­set man­age­ment on Thurs­day said it re­quires the ser­vices of re­puted law firms with ex­pe­ri­ence and ex­per­tise in merg­ers and ac­qui­si­tions/takeovers/strate gic dis­in­vest­ment/pri­vate eq­uity trans­ac­tion to act as le­gal ad­viser and as­sist gov­ern­ment in the process.

"The gov­ern­ment of In­dia has in-prin­ci­ple de­cided to con­sider the dis­in­vest­ment of the AI Group as a whole or its con­stituents fully or part thereof through strate­gic sale with trans­fer of man­age­ment con­trol,” it said.

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