‘Govt to keep open skies date’

The Government has left its approval to the Open Skies agreement with the US hanging till the minute, as the Cabinet is expected to clear it...

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The Government has left its approval to the Open Skies agreement with the US hanging till the minute, as the Cabinet is expected to clear it only after Prime Minister Manmohan Singh returns from his tour of Udhampur and Chandigarh.

As US Transport Secretary Norman Mineta also arrives here tomorrow, it leaves little room for the Cabinet to give its nod. Civil Aviation Minister Praful Patel, however, told The Indian Express that there was nothing to worry and that the agreement will be ready for signing on Wednesday.

It was learnt that the Finance Ministry had some observations on the tax exemptions being promised through the agreement to US carriers, besides some queries on the procedure for foreign exchange remittances.

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The agreement proposes to exempt US carriers from import restrictions, excise and customs duties on spares and equipment, apart from property tax and capital levies. The Finance Ministry had doubts whether this would adversely impact state-owned carriers, which do pay such duties.

The Civil Aviation Ministry has, however, clarified that these commitments were reciprocal in nature. As for technical queries, it has clarified that the agreement does guard against flouting of domestic rules and regulations. A standard text is also being prepared on foreign exchange remittances to avoid any confusion in the future, sources said.

It was further learnt that Patel has had a word with Finance Minister P. Chidambaram and it seemed the issues now stand resolved for the Cabinet to give its nod.

The agreement promises to open a new chapter in aviation links between both countries that have so far been guided by a framework agreed upon in February 1956.

The salient features say:

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• Either side can designate any number of airlines for operations.

• The designated airlines, including private carriers like Jet Airways and Air Sahara, can mount any number of services.

• Carriers of both countries will have sixth and seventh freedom rights, permitting them to operate to and from any point within and beyond each other’s territory.

• While neither side is obliged to pass on the benefits of the open skies agreement to an airline of a third country with which US or Indian carriers may have code-sharing arrangements, carriers are free to have such arrangements.

As for operational flexibility, some of the concessions are:

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• US and Indian carriers can enter into cooperative marketing arrangements with airlines of a third country.

• They can form pacts with surface transportation providers of either country.

For its part, Washington has agreed to follow the safety norms as outlined by the International Civil Aviation Organisation. Though the United States has been insisting to have its own norms followed after 9/11, officials said, New Delhi has pointed out that it has its set of stringent rules to take care of terrorist threats.