Wed, Jul 07, 2004
American, Indian Officials To Sign Open Skies Agreement
The US very much wants
to sign an aviation deal with India. Assistant Secretary of
Transportation for Aviation Karan K. Bhatia says he's willing to
put ink on paper anytime.
"We stand ready to sign an agreement at any point in time.
I’d be happy to sign one today."
Even though India has dropped a lot of the protective trade
barriers that surrounded its two national carriers, Air India and
Indian Airlines still enjoy some measure of protection. So Bhatia
met with Indian business leaders in New Delhi Monday, hoping to
build momentum for an open skies agreement.
"Airlines need flexibility, a lot of flexibility, to effectively
provide international aviation services," said Bhatia. "They need
the freedom to enter and exit markets and to adjust their schedule
and their prices in response to changing market conditions."
Bhatia's argument that such an agreement would be in India's own
best interest appears to be rubbing off on the business leaders.
"If we fully utilize the seats available to us we could increase
the revenue in our economy by Rs1 billion and create 2.8 million
jobs," said Yogendra Modi, president of the Federation of Indian
Chambers of Commerce and Industry.
The current 50-year old
agreement limits the number of cities to which airlines from each
country can fly. No private Indian airline is allowed to serve
markets in the US and strictly controls pricing.
"The agreement also effectively precludes our airlines from
entering into joint ventures with the exciting group of new Indian
airlines who currently provide only domestic service," said
Bhatia.
"We have relied on open skies agreements to liberalize our
international aviation relations around the world. We now have such
agreements with over 60 partners. And they have produced huge
benefits," he said. "But I believe that an open skies agreement
between the US and India could dwarf the benefits that have been
generated in many of these other relationships."
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