US ready for 'open skies' pact with India, puts condition

Tuesday, 06 July 2004, 19:30 IST
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NEW DELHI: The US said Monday it was keen to enter into an "open skies agreement" with India provided the third largest economy in Asia opened up its tightly regulated aviation sector. "Airlines need flexibility, a lot of flexibility, to effectively provide international aviation services," said Karan Bhatia, US assistant secretary of transportation for civil aviation and international affairs. "They need the freedom to enter and exit markets and to adjust their schedule and their prices in response to changing market conditions," Bhatia told a seminar organised by the Federation of Indian Chambers of Commerce and Industry. "Our aviation agreement with India imposes significant limitations on those freedoms." Bhatia said over the past 15 years the US had been actively seeking to replace old-style restrictive bilateral agreements such as the US-India aviation agreement with open skies pact. "In short, under the open skies agreement, governments get out of the business of determining the number of competitors, where they compete, and on what terms." He said the existing US-India aviation pact limited the number of cities that each side could serve in the territory of the other party. The pact also requires government approval for all pricing initiatives. "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 the US official. Experts say the current level of air services between India and the US does not benefit the market for air transportation between the two countries that by some estimates was around 1.5 million passengers last year. "US carriers are very interested in India and are increasingly eyeing it as a potential destination, and for that matter, I believe that Indian carriers are interested in expanding services to the US," said Bhatia. "But I believe that the carriers from both sides are constrained by the outdated bilateral agreement that exists between our two countries governing air services." He noted that other than a "few small changes" the US-India bilateral air services agreement had remained unchanged for nearly 50 years. He said the existing level of air services connections between India and the US did not benefit the economic, political and societal relationships that existed between the two countries. "We have relied on open skies agreements to liberalise our international aviation relations around the world. We now have such agreements with over 60 partners. And they have produced huge benefits," said Bhatia. "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."
Source: IANS