Air India has lost its preferential status when it comes to international flight allocations. The news comes as a result of Tata’s acquisition of the Airline earlier this year.

Air India no longer favourited

Air India will no longer take priority when international flight routes are decided. The Indian flag carrier was formerly state-owned, so it enjoyed certain perks like preferential treatment regarding air traffic. However, in January, the airline was officially sold to the Tata group and is now privately run.

Air India aircraft
Air India provides connections to over 70 international destinations | © Money Sharma

The Indian Directorate General of Civil Aviation (DGCA) laid out the updated rules in a circular sent out last week. Clause 3.6 in its regulations used to read:

“due consideration shall be given to operational plans submitted by Air India before allocation of the traffic rights to other eligible applicants”

Giving Air India an advantage over other airlines. The clause has now been revised to say:

“The central government may at its discretion grant or deny allocation of traffic rights to any air transport undertaking having regard to its preparedness to undertake such operations, viability of the operations on a particular route, overall interests of the civil aviation sector etc.,”

effectively levelling the playing field for airlines flying internationally.

What exactly does this all mean?

When India wants to set up a route to a new country, first, the two countries must negotiate the terms in what’s known as a “bilateral air services agreement.” The agreement lays out the volume of flights or seats between the two countries each week. Once the capacity is decided, the Indian government will choose which airlines to give the seats to.

Air India IndiGo AirAsia at airport
Indian Airlines will now have to compete with India’s other international carriers | © Indian Express

It used to be that India would get the first pick, but following the Tata group acquisition, the choice is now entirely at the government’s discretion. Aside from Air India and its subsidiary Air India Express, only four other airlines operate international flights: IndiGo, Go First, SpiceJet, and Vistara. All international routes will be split between these six airlines based on their need and capacity.

Tata Group acquisition

The Indian flag carrier was bought back from the government by its founders this year, who intend to reform the struggling airline. The Tata’s took on the airline on 27 Jan, initially installing former Turkish Airlines head Ilker Ayci as CEO. However, Ayci was forced to step down shortly after his appointment, following a barrage of negative press from the Indian media.

Ilker Ayci, former air india CEO
Ilker Ayci was Air India’s CEO for two weeks | © Reuters

And these aren’t the only teething problems the airline has faced. Earlier this month, the DGCA banned Air India from handling hazardous goods after an inspection of its cargo facilities in Delhi. The airline is still without a CEO, but chairman N Chandrasekaran reshuffled the top management of the airline earlier this month, bringing in top brass from other Tata firms such as Tata Steel.

Do you think Air India should have retained priority as the country’s flag carrier? Let us know in the comments below!

 

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