Air India CEO calls to contain expansion of foreign airlines

Air India chief executive and managing director Campbell Wilson has called to contain the expansion of foreign airlines to help Indian airlines grow.

In an interview to Hindustan Times, Wilson said this can be done by restricting any increase in flying rights in the country.

“It’s very difficult for us to fly an aircraft to North America, if there’s a surplus of capacity that allows people to travel out by someone (airline) else, and so too much just leaks out. India will not get the non-stop capacity from an Indian operator to these markets,” Wilson told the newspaper.

“So it’s a balance that has to be struck, allowing the market to grow. But also incubate your local market, because that’s fundamentally the most beneficial thing that you can do for the economy,” he said while replying to a question on India restricting an increase in bilateral arrangements with several countries,” he added.

The Air India chief said this is the right thing to do for the development of Indian aviation, but also for the good of Indian businesses and international connectivity.

Foreign flying rights are acquired under bilateral agreements between countries. Any designated foreign airline can operate to or from a point in India if it is designated as a point of call in the bilateral air services agreement (ASA) under the International Civil Aviation Organization (ICAO) framework signed between India and the country which has designated the airline. India has signed such pacts with 116 foreign countries, according to a reply given by the civil aviation ministry in Rajya Sabha on 1 August 2022.

Foreign carriers have leveraged these agreements to carry international passengers from India to other countries under what is known as the sixth freedom right. The ICAO framework’s Sixth Freedom of The Air allows a foreign carrier to fly passengers from India to a third country while stopping in its own country. Airlines such as UAE-based Emirates and Germany-headquartered Lufthansa have used the rights to fly Indian passengers to the US and Europe by adding a stop in their home country.

The growth of these airlines has come at the expense of Indian carriers, especially Air India.

Dubai, which has been one of the biggest beneficiaries of UAE’s ASA with India, carries 60-70% of the traffic from India to countries beyond its hub, Wilson said.

The Indian government has not revised bilateral arrangements with countries since 2014 as it waits for Indian carriers to expand their existing seat capacity.

Air India currently operates over 2,900 weekly flights with a fleet of 120 aircraft. In a massive exercise to expand its fleet, the Tata-owned company is acquiring 470 aircraft from industry giants Airbus and Boeing in a mega $70 billion deal. The agreement, signed in June, includes 34 A350-1000, 20 Boeing 787 Dreamliners, 10 Boeing 777X widebody aircraft, as well as 140 Airbus A320neo, and 70 Airbus A321neo.

The airline currently has a fleet of 120 aircraft, with nearly 2,900 flights operated every week.

The Airbus A350 is set to lead the way, with deliveries commencing in the coming months, potentially by November, while a major part of the order is scheduled to arrive from mid-2025.

Since the acquisition of Air India in January 2022, Tata Sons has undertaken a massive revamping exercise, with plans to merge the airline and Vistara to create a new unified entity.

Besides, InterGlobe Aviation Ltd, which runs IndiGo airlines with an operational fleet of about 300 aircraft, has placed an order of nearly 1,000 aircraft with Airbus.