Ministries clash over open skies pact with Asean

NEW DELHI: There is a new twist in the tale of the proposed open skies agreement with Asean countries. While the civil aviation ministry had opposed the open skies pact with Asean, other wings of the government have favoured this proposal. Ministry of external affairs, department of tourism and Planning Commission have supported the open skies proposal with Asean nations, sources said.

The issue has been discussed by the prime minister’s Trade and Economic Relations Committee (TERC). The committee has suggested that the civil aviation ministry should work towards an open skies policy with Asean by ’12.As reported by ET earlier, the civil aviation ministry has opposed the open skies pact with Asean in ’10, fearing that foreign competition from mega carriers like Singapore Airlines, Malaysia Airlines and Thai Airways would seriously jeopardise the Indian aviation industry.

The ministry’s view is that an open skies agreement would lead to excessive capacity deployment by Asean carriers at a time when the Indian aviation industry is not fully prepared to face competition. However, TERC has argued that negotiations with Asean nations should start by early ’08. It has said that air traffic between India and Asean should be gradually opened up to put in place an open skies policy by ’12. The committee expects that by ’12 the Indian aviation industry would mature to compete with mega carriers from Asean nations.

While TERC has favoured the pact, civil aviation ministry has been resisting the agreement saying it would result in excessive capacity deployment by Asean carriers, which could threaten the existence of Indian carriers already incurring huge losses.The civil aviation ministry has argued that domestic private carriers, which have been recently allowed to operate internationally, should be given considerable time to stabilise their operations before opening them to competition from international carriers.

It has suggested that an open skies agreement with Asean should be considered for implementation after ’15 — that too only for country-to-country traffic excluding the carriage of traffic particularly beyond India.In the meantime, the civil ministry has suggested that a calibrated approach towards liberalisation

of capacity entitlements and traffic rights with Asean should be preferred over an open skies arrangement. India’s final stand on the issue will be announced in December this year at the Indo-Asean summit to be held in Cebu, the Philippines.The Association of South East Asian Nations (Asean) consists of 10 countries including Singapore, Thailand, Indonesia, Mala-ysia and the Philippines. At present, India has open skies agreement with the US and a very liberal bilateral regime with the UK. Even SAARC nations have held largely unsuccessful talks for a similar regime.