India’s refusal to revise bilateral rights will result in restrictions by others: IATA DG

India’s refusal to revise bilateral seat allocations for international flights despite demands from several countries reflects an “old protectionist India”

India’s refusal to revise bilateral seat allocations for international flights despite demands from several countries reflects an “old protectionist India” that could result in others retaliating and restricting access for Indian airlines which in turn will hamper India’s ambition to develop a global airport hub, warns the Director General of global airlines body IATA, Willie Walsh.

“With the ambition to expand will come the need to allow more competition into India but you are not going to get the response from other countries if you have a restricted bilateral. Other countries will restrict capacity as well,” Mr. Walsh told The Hindu in an exclusive interview at the IATA’s headquarters in Geneva.

The International Air Transport Association (IATA) represents 300 airlines globally. Mr. Walsh’s comments come at a time airlines such as Emirates, and Turkish Airlines have demanded a revision of bilateral rights. Emirates CEO Tim Clarke said recently that India’s refusal to allow Gulf carriers more flights into India could result in losses of “$800 to $900 million” for Indian airlines who too would be deprived of reciprocal rights. Minister for Civil Aviation Jyotiraditya Scindia has ruled out a revision of bilateral seat allocations.

Mr. Walsh said that the demand from various airlines such as Emirates and Qatar for additional seats or flights within the bilateral agreements were due to “demand for air travel significantly outstripping the services available,” and therefore the ultimate loser will be the consumers who are forced to pay higher airfares because of fewer flights.

Mr. Walsh rued that the government’s policy reflected “old protectionist India” which didn’t have a national airline that was capable of competing at a global scale.

“Going forward people should be more ambitious and confident and believe that Air India is capable of competing on a level playing field,” he said. He said that the potential for growth in India was massive and that though its domestic market was at third place after US and China, it only accounted for 2% of global revenue passenger kilometres [the number of revenue passengers multiplied by the total distance traveled], while in China it was 9.8% of global RPKs.

In an exclusive interview with Jagriti Chandra at IATA’s Headquarters in Geneva, its DG Wille Walsh says India’s decision to not respond to demands for revising bilateral seat allocations could result in other countries responding with restrictions for Indian airlines. He also speaks about challenges pertaining to pilot shortages as well as the new confidence in the Indian aviation market following the massive Air India aircraft order.