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."

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