The Hindu : Business : New air services pact with UAE

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Friday, Nov 28, 2008
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New air services pact with UAE

Special Correspondent

NEW DELHI: The Union Cabinet on Thursday approved the signing of a new air services agreement with United Arab Emirates (UAE) to keep pace with new developments in the civil aviation sector. The existing agreement was signed in 1989.

Under the new pact, both the countries will be entitled to designate any number of airlines for operation of mutually agreed services for which the respective country will grant appropriate authorisation and permission. The designated airlines could enter into cooperative marketing arrangements such as code share or commercial arrangements.

They would also be free to decide tariffs in respect of the agreed services at reasonable levels based on commercial considerations. They would not be required to agree on the fares to be applied. However, either party would have the right to intervene so as to prevent tariffs whose application constituted anti-competitive behaviour, which has or is likely to have the effect of crippling a competitor or excluding a competitor from a route, as well as to protect consensus from tariffs that are excessive or restrictive due to the abuse of a dominant position and to protect airlines from tariffs that were predatory or artificially low.

Chaired by Prime Minister Manmohan Singh, the Cabinet also gave its nod for the signing of a memorandum of cooperation with the League of Arab States on the establishment of an India-Arab Cooperation Forum.

The Cabinet Committee on Economic Affairs, which also met here on Thursday, gave its approval for the Kakatiya longwall project of Singareni Collieries in Warangal district, Andhra Pradesh, for a net capital requirement of Rs. 453.63 crore.

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