Tata-Owned Air India Won’t Get Any Preferential Status In International Routes: Find Out Why?

The aviation watchdog, the Directorate General of Civil Aviation (DGCA) in its revised set of guidelines said that the Air India now shall no longer enjoy a priority in the allocation of international traffic rights. This comes 2 months after the Tata Sons taking over Air India from government.
In its revised guideline issues on April 19, the advantage over other private airlines were dropped by DGCA from the former state-owned airline.

Deleted Clause

The clause which now has been deleted, read “Due consideration shall be given to operational plans submitted by Air India before allocation of the traffic rights to other eligible applicants.”

This clause was part of the Guidelines for Grant of Permission to Indian Air Transport Undertakings for Operation of Scheduled International Air Transport Services, which was issued on March 15, 2017.

Bilateral air service agreements are negotiated between governments. The number of flights as well as destinations that the airlines can operate between the 2 nations are determined by these factors.
It is on the reciprocal basis that the entitlements like number of seats or flights per week, are traded.
In our nation, it is the government which holds these entitlements and then in turn grant it to an airline post the request by airline.

A total of 121 countries have signed air service agreements with India. Notably, despite Despite being part of the United Arab Emirates (UAE), the civil aviation ministry has inked separate agreements with Dubai, Abu Dhabi, Sharjah, and Ras Al-Khaimah.

A Brief History Of Air India & The Deal

In January, Tata Sons took control of Air India from the government, the formal homecoming for India’s first airline born in the company in 1932 before it was nationalised nearly 70 years ago in 1953 and began a turbulent journey that pushed its economic viability to the brink.

It was Air India which led the global aviation boom in the 50s, 60s and 70s. With its Maharaja mascot, the airline was once renowned for its lavishly decorated planes and service championed by founder JRD Tata.

Since the mid-2000s, Air India’s reputation declined as financial troubles mounted when it began to lose market share to low-cost airlines like SpiceJet and IndiGo.

Tata conglomerate got 100% stake of Air India from the government in the month of October, 2021 at ?18,000 crore.

The reserve price of it was kept at ?12,906 crore. An offer of ?15,100 crore was made by SpiceJet promoter Ajay Singh. But with ?18,000 crore, Tata sealed the deal.