India’s decision to reintroduce the Open Sky Policy for foreign cargo carriers marks a significant step towards enhancing efficiency, competitiveness, and exports in the country’s air cargo sector. After nearly three years of restrictions, this move holds promise for revitalizing the industry and contributing to India’s economic growth.
Background
During the COVID-19 pandemic, international carriers faced limitations, operating solely from six metro airports in India. This restriction led to substantial losses for airlines and airports alike, prompting a need for policy revision to support the struggling sector.
Indian Carrier Resilience
Despite the challenges, Indian carriers seized the opportunity by increasing their cargo capacity, bolstered by the government’s revision of the Open Sky Policy in December 2020. This shift resulted in a notable uptick in the share of international cargo traffic and revenue for domestic airlines.
Ministry's Response
Initially met with resistance from exporters over reduced goods capacity, the Ministry of Civil Aviation reinstated the Open Sky Policy to facilitate air cargo movements. This move aims to support Indian carriers in expanding their capacity and navigating the evolving market dynamics.
Industry Reception
Industry stakeholders, including airports, airlines, exporters, and industry associations, have warmly welcomed the government’s decision. They anticipate significant benefits such as improved efficiency, expanded exports, and alignment with the government’s ambitious economic targets.
Infrastructure Development
The revival of the policy is expected to spur infrastructure development at non-metro airports, enhancing their cargo-handling capabilities and unlocking additional export capacity. Additionally, by providing better connectivity closer to cargo-origin points, congestion issues at major hub airports are poised to be addressed effectively.
Foreign Carrier Interest
Foreign airlines are showing renewed interest in resuming cargo operations in India, with several carriers announcing plans to introduce new routes. This renewed engagement underscores the positive impact of the policy change on fostering a dynamic and competitive air cargo environment.
Positive Outlook
The reinstatement of the Open Sky Policy represents a collaborative effort between stakeholders and policymakers. This move is anticipated to fortify the Indian economy, stimulate growth in the air cargo sector, and ultimately benefit exporters and the broader economy.
Conclusion
India’s reintroduction of the Open Sky Policy for foreign cargo carriers signals a turning point for the country’s air cargo sector. By fostering competitiveness, efficiency, and export growth, this policy shift holds the potential to propel India towards its economic objectives while fostering a vibrant air cargo ecosystem.
The Open Sky Policy in India allows foreign cargo carriers to operate freely, promoting competition and efficiency in the air cargo sector.
The reintroduction aimed to revitalize the air cargo sector after pandemic-induced restrictions and support Indian carriers in expanding their capacity.
During the pandemic, international carriers were limited to operating from only six metro airports in India, leading to significant losses for airlines and airports.
The policy change is expected to boost efficiency, competitiveness, and exports in the air cargo sector, ultimately contributing to India’s economic growth.
Indian carriers capitalized on the opportunity by increasing their cargo capacity, leading to an increase in their share of international cargo traffic and revenue.
Yes, exporters initially expressed concerns over reduced goods capacity. However, the Ministry of Civil Aviation reinstated the policy to facilitate air cargo movements.
Industry stakeholders, including airports, airlines, exporters, and industry associations, have widely welcomed the decision, foreseeing significant benefits for the sector.
Yes, the policy’s reinstatement is expected to enhance infrastructure at non-metro airports, unlocking additional export capacity and promoting balanced growth across regions.
Yes, foreign airlines are showing renewed interest, with several carriers announcing plans to introduce new routes, signaling a positive outlook for the industry.
By strengthening the air cargo sector, the policy change aligns with the government’s objective of achieving a USD 5 trillion economy, fostering growth and competitiveness in the global market.
Source: Logistics Insider