More Flights, Lower Fares

Transportation Secretary Norman Mineta announced Friday that the United States and India have initialed a landmark Open Skies aviation agreement that will lead to more flights, lower fares and stronger economic ties between the two countries.  The agreement comes after three days of negotiations, launched by Mineta and India's Civil Aviation Minister Praful Patel last Thursday.

"This agreement means that US and India will be closer than ever before," said Mineta.  "Today's agreement begins a new era where American and Indian consumers, airlines and economies can reap the rewards of cheaper flights, more choices and faster air service."

Under the new agreement, airlines from both countries will be allowed to select routes and destinations based on consumer demand.  The deal provides for open routes, capacity, frequencies, designations, and pricing, as well as opportunities for cooperative marketing arrangements, including bilateral code-sharing with domestic Indian carriers.  The agreement also allows all-cargo operators to operate in either country without directly connecting to their homeland.

India and the United States are the world's two largest democracies and two of world's fastest growing economies, Secretary Mineta noted.  Trade between the two nations totaled $18 billion in 2003, a 13.5 percent increase from the previous year, and was growing at an even faster pace in 2004.  Such a relationship needs to be supported by the strong commercial aviation ties that this agreement will create, he said, including more direct flights to serve the approximately 2 million passengers a year traveling between the two countries.

The provisions expected to provide the greatest economic benefit, like those affecting routes and code-sharing, take effect immediately. The entire agreement will come into force once it is signed, expected to take place in the near future.  The new pact replaces an antiquated agreement signed in 1956 that placed restrictions on the number of airlines that could fly between the two countries, cities that could be served, the frequency of service and pricing.

With this Agreement, India will become the 67th bilateral US Open Skies partner.

FMI: www.state.gov/e/eb/tra/c661.htm