There are 25,000 seats per week vacated by the defunct Kingfisher. The additional weekly seat entitlement of 40,000 by India would only help Etihad whose sole aim is to establish Abu Dhabi as a hub at the cost of Indian airports

The deal between India's Jet Airways and Abu Dhabi-based Etihad Airways has several angles. However, one point that stands out is how the deal was ‘facilitated’ to provide benefit to both the private parties at the cost of India. Especially, signing of the bilateral for enhancing weekly seat entitlement to 40,000 seats between India and Abu Dhabi is turning out to be more beneficial to Etihad than anyone else.

Basically, the bilateral covers only Third and Fourth Freedom Rights (as provided in the Convention on International Civil Aviation or Chicago Convention). However, the deal between Jet and Etihad is based more on the Fifth and Sixth Freedom Rights and the bilateral appears to facilitate this. More about the Freedom Rights later.

The Indian government has literally given Jet and Etihad the right to pick up passengers from any domestic airport to Abu Dhabi. From here, the passengers would be flown to destinations beyond United Arab Emirates (UAE) like London and New York.

However, this requires consent of the third country to which passengers are flown. In this case, the government has chosen to merge its own bilateral flight slots on international routes, which either remain unused or have been given up by domestic carriers like Air India and the grounded Kingfisher Airlines.

In February 2013, the Indian government decided to scrap international flying rights and domestic slots of Vijay Mallya-led Kingfisher due to non-utilization. The cancellation of rights of Kingfisher to fly overseas alone created 25,000 seats per week for use to eight countries, including Dubai, UAE, UK, Hong Kong, Singapore, Nepal, Sri Lanka and Thailand.

Ideally, this should have benefitted domestic carriers like Air India. However, these vacated slots were adjusted to several destinations beyond Abu Dhabi to be used by Etihad, thus violating the Chicago Convention.

The Parliamentary Standing Committee on Transport Tourism and Culture has rightly pointed out this issue in its report submitted in the Lok Sabha on 3 May 2013. Questioning the bilateral agreement, the Committee had said, “Indian carriers are not in a position to use increased seat capacity due to fleet constraints. In such a situation, the foreign airline may try to catch up passenger traffic headed to destinations in North America, Europe, Africa and Middle East resulting in huge losses to Air India and various airports of India.”

Emirates Airlines has already established Dubai as its hub point by operating more flights and carrying more passengers to and from India. More than 70% of the passengers carried by Emirates Airlines travel to points beyond Dubai, on Emirates’ network. Etihad is trying to emulate the same for Abu Dhabi with help from the Indian government.

The Parliamentary Committee also mentioned about Jet Airways selling three of its slots at London’s Heathrow Airport to Etihad, which was confirmed by the secretary of MCA. This was done without taking any permission from the Indian government. The Committee categorically said, “Carriers have no right to sell the bilateral allotted to them to other airlines that too a foreign airline. The Committee recommends that the government should take away the slots from Jet Airways and the airlines should be penalized for selling the national property—bilateral.”

The minutes of the meeting held on 22 April 2013 under the chairmanship of P Chidambaram not only talks about the bilateral but also mentions third country code sharing and air service agreement. Here is the mandate approved for the bilateral air service negotiation between India and Abu Dhabi...

1. Additional entitlement up to 40,000 seats per week may be considered in addition to the current entitlement in a phased manner over next few years, preferably 3 to 5 years.

2. Third country code sharing [code sharing with designated airline of third country i.e. other than India & UAE (Abu Dhabi)] and domestic code sharing may be allowed.

3. Any other issue relating to air service agreement may also be considered in the overall interest of bilateral relationship.

On the same day, the Group of Ministers, including Chidambaram, Ajit Singh, minister of civil aviation, Anand Sharma, minister of commerce and industries and Salman Khurshid, minister of external affairs, as well Shivshankar Menon, National Security Advisor and Pulok Chatterji, principal secretary briefed the prime minister.

PM Manmohan Singh raised some objection on the bilateral, which was side-tracked after an assurance from Ajit Singh and commerce minister Sharma.

The decision was then implemented within 48 hours, and on 24th April, the bilateral agreement between India and Abu Dhabi was signed. This was followed by signing of a deal between Jet and Etihad on the same day. However, signing of the bilateral between two countries and buying stake in Jet is proving to be more beneficial to Etihad.

Coming back to Freedom Rights, the International Civil Aviation Organization (ICAO) or Chicago Convention, a specialized agency of the United Nations, looks after coordination and regulation of international air travel. The original document of the Chicago Convention was signed on 7 December 1944 by 52 signatory states. At present, the Chicago Convention has 191 state parties, including all member states of the United Nations—except Dominica, Liechtenstein, and Tuvalu—plus the Cook Islands.

The Freedoms of the air are a set of commercial aviation rights granting a country’s airline(s) the privilege to enter and land in another country’s airspace. The First through Fifth Freedoms are officially enumerated by international treaties, especially the Chicago Convention. Several other Freedoms have since been added and although most are not officially recognised under international treaties, they have been agreed by a number of countries. The lower-numbered Freedoms are relatively universal while the higher-numbered ones are rarer and more controversial. At present, there are nine Freedoms.

Importantly, Freedoms are not automatically granted to an airline as a right; they are privileges that have to be negotiated and can be the object of political pressures.

The First Freedom is the right to fly over a foreign country without landing. The Second Freedom allows technical stops without the embarking or disembarking of passengers or cargo. The Third and Fourth Freedoms allow basic international service between two countries.

The Fifth Freedom allows an airline to carry revenue traffic between foreign countries as a part of services connecting the airline's own country. The unofficial Sixth Freedom combines the Third Freedom and Fourth Freedoms and is the right to carry passengers or cargo from a second country to a third country by stopping in one's own country.

India and UAE have signed an agreement for only Third and Fourth Freedom Rights, which allows bilateral flights on reciprocal basis between two countries. However, the deal between Jet and Etihad is completely based on Fifth and Sixth Freedom. This is really a cause for concern, as it has the potential to cause premature death of several Indian carriers.

Reported by: Yogesh Sapkale

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