New bilateral agreement between Australia and India

Australia and India have negotiated a new bilateral agreement that immediately doubles airline seat capacity between major cities and opens both markets to unlimited freight operations.

The agreement paves the way for further liberalisation in a growing market that has been targeted, along with China, as a high-growth area by Qantas.

Qantas returned to Mumbai this month with three services a week and wants to boost its presence in the fast-growing Indian market, adding destinations and through services to London.

“The plan at the moment is to operate three (services a week) to Mumbai, grow the market both into India and into Australia from India, build up frequency, potential other destinations and then through traffic,” Qantas executive general manager John Borghetti said yesterday.

Under the accord, weekly seats between Australia’s gateway ports – Sydney, Brisbane, Melbourne and Perth – and four major Indian cities rises from 2100 to 4500. The Indian cities are New Delhi, Mumbai, Calcutta and Chennai. The capacity rises by 1000 seats a year to 65,000 in October 2006, by which time Australia will also have access to two additional ports.

The agreement allows an unlimited number of airlines to operate between the two countries and unrestricted bilateral code-sharing between Indian and Australian carriers.

Airlines will also be allowed to use leased aircraft or leased aircraft and crew to operate services, a move not permitted previously and which would help low-cost carriers. But code-sharing with carriers from a third country will be limited to 25per cent of seat capacity.

“These new arrangements further consolidate the strong and growing trade relationship between India and Australia and should also assist in opening up additional opportunities for two-way tourism between the two countries,” a federal government statement said yesterday.

The announcement came as the federal Coalition promised to continue with its policy of liberalising international aviation agreements and said an open-skies agreement with the European Union was a priority.

Story courtesy THE AUSTRALIAN