India set to ease restrictions on local carriers flying abroad: minister

Tue Jan 14, 2014 6:06am EST
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By Devidutta Tripathy and Siva Govindasamy

NEW DELHI/SINGAPORE (Reuters) - India could ease restrictions that prevent some of its domestic airlines from flying on international services within a month, potentially benefiting start-ups set up by Singapore Airlines (SIAL.SI: Quote) and Malaysia's AirAsia (AIRA.KL: Quote) that aim to begin operations in 2014.

New Delhi is also considering a proposal to allow Airbus's (AIR.PA: Quote) A380 planes to land at local airports, aviation minister Ajit Singh said on Tuesday.

India's ban on A380s is mainly due to concerns that foreign carriers may further hurt state-run Air India by grabbing a larger share of international traffic.

Under existing rules, Indian carriers are also required to be in operation for at least five years and have 20 aircraft to be eligible to fly international routes.

Singh told reporters that New Delhi would seek the federal cabinet's approval by next month to "scrap this rule".

"At a macro level, this restores credibility to the Indian aviation sector," said Amber Dubey, an aviation expert at consultancy KPMG, of the Indian government's plans.

"It shows that the policy direction is always towards greater competition, the respect for logic, and being more aligned to global best practices," he said.

Indian conglomerate Tata Sons has formed a joint venture with SIA to start up a full service carrier, which is expected to begin operations in the second half of 2014.   Continued...

A car moves against the backdrop of a Jet Airways aircraft preparing to land at the airport in the western Indian city of Ahmedabad August 8, 2013. REUTERS/Amit Dave