Air India Receives a Dominant Share of Jet Airways’ Unused International Traffic Rights

The re-allocation of traffic rights will augment the capacity on the given foreign routes.

By May 22nd, 2019 AT 2:23 AM
Highlights:
  • The allocation is for the ongoing summer and is temporary.
  • The move will reduce the valuation of Jet Airways, and it will harm the revival plan.

The Government has decided to allocate 5700 weekly seats on India-Dubai route to Air India from Jet Airways’ unused quota. Similarly, Air India will also receive 5000 seats on India-Qatar routes and 4600 seats on India-London routes from Jet Airways’ quota.

The allocation is for the ongoing summer and is temporary. If Jet Airways successfully revives from the current crisis and is back to operation, Air India will have to submit the allotted rights back to Jet Airways.

Air India

The news about the re-allocation of Jet Airways’ international traffic rights was taking rounds for weeks now. Private airlines including SpiceJet, IndiGo, GoAir, Vistara pitched for the international traffic rights in the last meeting. However, Air India received preferential rights. The airline lost the rights to the private players in the previous UPA Government.

Also Read: Air India Adopts Steps to Make Its Grounded Planes Operational, Earmarks INR 500 Crore for the Purpose

IndiGo’s founder Rahul Bhatia suggested the allocation of seats in proportion to the fleet capacity of the airlines, but Vistara opposed the suggestion saying that smaller airlines have to be given a bigger share.

The re-allocation of traffic rights will augment the capacity on the aforementioned foreign routes. However, the move will reduce the valuation of Jet Airways, and it will harm the revival plan. The investors of Jet Airways’ are already unhappy about the re-allocation of its airport slots to other airlines.

Meanwhile, the lenders of Jet Airways received the bids from interested parties and is now in the process of getting them verified legally. According to a report by Economic Times, there are only limited options left for the lenders to recover INR 8400 crores. The lenders are also planning to stitch a deal involving two bidding parties. Darwin Group has reportedly offered INR 14000 crores to acquire the airline.

Jet Airways suspended its operations on April 17 due to financial crisis.

Also Read: Jet Airways Suspends All Domestic and International Flights

Ria is a lead news writer at Aviation Scoop. She writes from dawn to dusk, reads in the evenings, and draws at some ungodly hours. She loathes human interaction, and finds solace in the sweet, musky smell of old books, and rain. Find her on Twitter here - @rialakshman.

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