Millennium Post

Bilateral seat quota: AI had warned UPA govt

New Delhi: Amid enquiry into the alleged role of a middleman in higher bilateral seat quota with Gulf countries during UPA era, it has now emerged that national carrier Air India had repeatedly warned against such move.

Letters written by the airline to Civil Aviation Ministry had claimed that the capacity entitlements on almost all the key international routes were benefitting foreign carriers requiring the Indian government to trade cautiously.

In a letter faxed to the Ministry in April 2010, the state-run carrier had argued that the capacity deployed by foreign airlines was in far excess of the market requirements. It had noted that excess capacity was causing a deleterious effect on Air India and needed to be addressed.

"Any further enhancement of capacity entitlements particularly under the bilaterals with the SE (South East) Asian and Gulf/Middle East carriers will enable the carriers from these countries to further increase their capacity deployment, aggravate the already existing capacity situation and divert even more traffic/revenue from the Indian carriers," the letter from T.K. Palit, Executive Director (Planning and International relations) to the aviation ministry stated.

The airline stated that major foreign carriers operating to and from India were much stronger than Air India and other local airlines. Further, they had large and modern fleets, bigger network and well-developed hub airports in their home bases.

In addition to this, the foreign airlines were cash rich and could sustain yield and seat factor declines over long periods of time because of the financial and other support they received from their governments.

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