India has amended its Open Sky agreements this week, placing restrictions on foreign cargo airlines operating flights to India. Non-scheduled foreign carriers can now only operate freight services to six major cities in India, with permissions required for others. The move is likely aimed at boosting operations for Indian freight carriers.
New restrictions
The Tribune reported this week that the DGCA, India’s aviation regulator, has amended the 1990 Open Sky agreement for the first time. Under the amended agreement, non-schedule foreign airlines can only operate unrestricted cargo flights to six major airports: Delhi, Mumbai, Bangalore, Hyderabad, and Kolkata. To land in any other airport, these carriers will have to request DGCA clearance, which could be denied.
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Before this change, foreign carriers could land at any airport which offered customs and immigration services, subject to operational and safety requirements. This amendment comes at a time when the airline freight industry is rapidly growing due to a drop in overall cargo capacity.
Growing industry
Since the original agreement in 1990, India’s non-schedule operators have grown considerably. From 11 operators will 98 planes in 1991, the industry now has 98 operators with 317 planes. However, despite this exponential rise, non-scheduled carriers did not fly any international cargo flights in 2018-2019.
The new rules might be aimed at boosting Indian carriers, allowing them to operate flights out of smaller airports with lesser competition. The coming months will show us the impact of this change, and also if non-scheduled operators choose to take advantage of the move.
The DGCA also added that if any Indian carriers face restrictive practices or impediments abroad, they may approach the DGCA for action. This could mean the body is getting more serious about expanding India’s overall aviation footprint.
The year for cargo
2020 has definitely been profitable for one type of airline: cargo airlines. After some early instability, freight airlines have seen a huge growth in the industry. This is primarily due to international passenger flights being grounded, which usually carry up to 50% of global cargo in their belly.
Airlines in India have taken advantage of this rising demand for capacity too. SpiceJet, the country’s only airline with a dedicated freighter wing, has recently added a converted A340 to its fleet for long-haul cargo flights. The airline’s cargo business grew 144% in the second quarter as demand surges. Other airlines have also converted their passenger planes to carry more cargo.
The DGCA’s recent amendment does seem to target the cargo industry, with hopes to boost India’s share of the global market. Additionally, it will be interesting to see how this plays out and if any foreign airlines react to the change.
Do you think India’s air freight business will rapidly expand? Let us know your thoughts in the comments below!
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