Under the policy being formulated, the bilateral agreements signed between India and other countries may move to code-sharing arrangement between the designated carriers of the two sides, from the existing royalty agreement, they added.
Significantly, the ministry of civil aviation is planning to fix a definite time period for the operation of services by the foreign carrier at the time of signing of the air service pact between the two countries.
This has been done in the case of Emirates for a proposed flight between Dubai and Cochin, the agreement for which was signed recently and is valid for two years.
This is to ensure that the business of the designated carriers is not hurt in future when it is in a position to operate frequencies to other countries and increase operations. It would happen once the fleet size of Air India increases.
The ministry of civil aviation is sending a communication to the European airlines and US carriers asking their needs of increasing capacity in terms of seats on a weekly basis.
Other carriers from south-east Asia and Gulf are not being considered for capacity increases as the inbound rush is only from US and Europe, official sources told FE. Each year the inbound traffic swells in the winter months, particularly in January, creating a chaotic situation with foreign airlines queuing up at the ministry of civil aviation for increasing capacity at the last minute. This year we wish to avoid such a situation, they said.
The government was till now going slow on signing air service agreements with various countries as there was no clear policy on bilaterals. Since most of the issues have been thrashed out by various ministries now, we will go ahead with agreements, said officials.
Major airlines have approached the ministry seeking more frequencies to points of call as well as to increase their points of call here.
By making the royalty, to be earned from foreign carriers, more reasonable the government hopes to attract more foreign countries to operate services to India and provide better connectivity to passengers.
Under the code share agreement, the designated carrier Air India obtains a specified number of seats from the operating carrier at an agreed cost per seat, which is usually lower than the market rate.