• Majority foreign stake puts curbs on overseas flights

    Airlines with a majority foreign ownership will not be allowed to fly on international routes, senior Civil Aviation Ministry officials said on Tuesday. On Monday the government liberalised norms in the sector, allowing foreign investors to own up to 100 per cent stake in domestic carriers.

    The bilateral air traffic agreements that India has signed with most of the countries have ‘substantial ownership and effective control’ (SOEC) clause which may not permit the airlines with majority foreign ownership to fly abroad from India, a senior Ministry official said.

    At present, India has bilateral air service agreements with 109 countries. “The SOEC clause is applicable at two places – at the stage of air operators’ permit and for bilateral rights to fly abroad,” said another senior official.

    The ICAO template on air services agreements says the SOEC norms in bilateral agreements address “potential concerns such as safety, security or other economic aspects including potential emergence of “flag of convenience.” However, the template is not binding and the countries are free to set their own terms. India will have to amend the SOEC clause in its agreement with a particular country for allowing an airline with majority foreign control to fly abroad, an official said. “At present, only a couple of countries that India has bilateral agreements with do not acknowledge the SOEC norms,” the official added. James Develin Authentic Jersey

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