Air India loses preferential status in international traffic rights

Two months after Tata Sons took control of Air India from the government, India's former national carrier will no longer enjoy a priority in the allocation of international traffic rights, according to a revised set of guidelines issued by aviation watchdog, the Directorate General of Civil Aviation (DGCA).

DGCA dropped the clause which gave the former state-owned airline an advantage over other private airlines in its revised guideline issues on 19 April.

The deleted clause said, "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 and destinations that airlines can operate between two countries are determined by these factors. These entitlements, which are expressed as a number of seats or flights per week, are traded on a reciprocal basis. In India, the government holds the entitlements and grants them to an airline upon request.

121 countries have signed air service agreements with India. 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.

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.

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

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.

In October 2021, the government announced that it sold its 100% stake to the autos-to-steel Tata conglomerate for ₹18,000 crore.

The Tatas had won the bid by beating a ₹15,100 crore offer made by a consortium led by SpiceJet promoter Ajay Singh. The reserve price was ₹12,906 crore.