Lok Sabha
It has been decided by the Government that smaller airlines having 7 services or less to India may be exempted from the Mandated Commercial Agreement, w.e.f. 1st January 2008.This information was given by Shri Praful Patel, Minister for Civil Aviation in a written reply to a question in the Parliament today.
In December, 2004 it was decided that all existing Government Mandated Commercial Agreements would be reviewed and phased out over the next five years and all new operations by foreign carriers, both on new destinations as well as on existing routes would be free from the obligations of Mandated Commercial Agreement. The decision for smaller airlines was taken subsequently. This new system is expected to bring about a level playing field between the national carriers and the foreign carriers on the international operations.
Answering to whether after doing away with the existing system the air fares were likely to come down, the Minister replied that while air fares are determined by market forces, it would be reasonable to expect that the airlines would be in a position to lower the fares once the Mandated Commercial Agreements cease to exist.
MC/GK
(Release ID :30340)