US Department of Transport moves to regulate Air India's US Charter operations - Live from a Lounge

The U.S. Government has moved forward to restrict Vande Bharat flights being operated by Air India to and from the United States of America, as they notice unfair and discriminatory practices with respect to US Carriers on the Indian side.

The US DoT order, issued overnight, states that the GoI has imposed restrictions that prevent US air carriers from making use of their charter rights. Essentially, the GoI has prevented US Carriers from conducting India - US passenger charter operations.

The language is scathing,

In this regard, we note that Air India has been conducting self-described "evacuation" charters (i.e., repatriation charters), between India and the United States in both directions since May 18, 2020. On May 19, 2020, an official from the Department advised Air India of the Department's concerns that some, if not all, of Air India's so-called evacuation charters have gone beyond true evacuations (at least on the India to the United States segments) and involved sales to any member of the general public able to enter the United States. On May 26, 2020, Delta Air Lines, Inc. ("Delta"), via letter, requested permission from the Indian Ministry of Civil Aviation (MoCA) to perform repatriation charter services similar to those provided by Air India. To date, Delta has not received approval to perform the requested repatriation charters.

This restrictive and discriminatory treatment of U.S. carriers as regards charters has important implications in the area of scheduled operations as well. On March 25, 2020, the GoI suspended all scheduled passenger services in response to public health threats. On June 3, 2020, Air India released a schedule for additional repatriation flights that includes 49 U.S.-India round-trip charter flights that are scheduled to operate between June 10-July 1, 2020. On June 13, Air India released a schedule for 10 additional repatriation flights between June 20-July 3, 2020. Prior to the March 25th suspension of scheduled passenger services, Air India operated 34 round-trip flights per week to the United States. With 59 flights advertised for the period from June 10 to July 3, 2020, Air India would be performing charter operation at a rate of 53% of the operations it previously performed as scheduled services. As such, it appears that Air India may be using its passenger repatriation charters as a way of circumventing the GoI-imposed prohibition of all scheduled services. This situation, in which Indian airlines are permitted to perform services pursuant to their rights under the Agreement while U.S. carriers are not, creates a competitive disadvantage for U.S. carriers vis-à-vis Indian carriers, in contravention of the fair and equal opportunity to compete provision of Article 11 of the Agreement.

The US DoT states that the US Government first registered its objections with the Government of India via the US Embassy New Delhi on May 28, 2020, but the government of India has failed to remedy the situation so far.

The view of the US DoT is, that they will now scrutinize each and every flight to be operated between India and USA operated by Air India, and authorise them on a case-by-case basis. Air India will need to file applications for each flight at least 30 calendar days before the proposed charter flight going forward.

Bottomline

This move should put an end to the unilateral one-sided operations being made by Air India between India and the United States. It might mean that either Air India will also stop operating more charter flights to the USA after this current bout of 59 flights, or it might also allow Delta and United to start charter flights to India. Either way, this is a poor show on the Indian side which had to be served a US DoT order to jolt them back into the reality that their operations are one-sided and do not reflect the true nature of a market where competition is allowed to thrive.

This is not the first time Air India has become a tool to implement the requirements of a competitive agreement. The US DoT had, last year also issued an order on Air India's US operations when the US carriers were not being allowed to do their own ground handling in India.

(HT: @ KaranAtALounge, @ WandrMe)

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