Why India's air bubble treaties are no ordinary Air Services Agreements

Air Services Agreements (ASAs), more commonly known as bilaterals, allow airlines to fly smoothly between various countries. It is commonly believed that they are exchanged in perpetuity but many have termination clauses. We look at some of the issues with ASAs and their termination.

1. What are Air Services Agreements?

Air Services Agreements (ASAs) are formal agreements exchanged between various countries that allow the designated airlines of one country to fly to another country with which such an agreement has been signed. The agreements could specify the capacity in terms of the number of seats per week in each direction or the number of flights per week in each direction and also specify the cities to which the designated airlines can fly. Depending upon the demand and individual needs of each side, capacity to each city could be defined as well.

2. How are ASAs exchanged?

Airlines in India, for instance, may make a request for adding capacity to a specific country to the Ministry of Civil Aviation (MoCA). The MoCA then sends the request to the Ministry of External Affairs (MEA), which forwards it to the Indian Mission in the country with which the Indian carriers are keen to have more flights.

Similarly, if foreign airlines are keen on having more flights, they approach the Indian Mission in their country with a request for enhancing capacity. The Indian Mission sends the request to the MEA, which forwards it to the MoCA, which then reaches out to the Indian carriers to gauge their interest in enhancing the number of flights.

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It is only after this process is complete that the officials of the two countries meet either in India or in the foreign country to take the discussions further and come to a conclusion on what kind of capacity, if any, needs to be added and how such a capacity increase needs to be phased.

3. Is an ASA decided in perpetuity?

Normally, an ASA is decided in perpetuity. However, the Covid-19 pandemic and closure of borders globally have changed the situation. With borders closed, India mounted international air transport bubble flights with over 25 countries including the US, Netherlands, the UK, Qatar, Germany and France on which only eligible passengers are allowed to fly. Such eligibility is defined by the kind of visa each country is accepting. 

Also, the air bubble agreement defines the eligibility in terms of the final destination of the passenger. For instance, Lufthansa would be permitted by India to carry passengers bound for or coming in from the European Union (EU) but not North America. Carriers of the UAE are permitted to carry passengers originating in or destined to the UAE, Africa or South America only. If these had been flights under ASA, passengers bound for any third country would have been permitted besides fewer visa restrictions on passengers.

Sukun Chandele, Partner, Mind Legal, says bilaterals can be renegotiated at any point in time. He points out that the International Civil Aviation Organisation (ICAO) hosts Air Services Negotiation Conferences (ICAN) where these bilateral agreements are renegotiated between different countries. According to India’s National Civil Aviation Policy, bilateral air traffic rights, such as the number of flights and seats between India and any other country, are subject to periodic renegotiations.  

The terms and conditions of these air service agreements can be renegotiated and as long as the two countries agree to the changes and report these changes to the ICAO and follow the ICAO’s directives, the bilaterals can be changed at any point in time.  

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Moreover, the ASAs also have a termination clause and can be terminated even unilaterally by one party.  

The bilaterals also have built-in arbitration clauses in case of a deadlock between the two countries exchanging the bilaterals. These clauses stipulate that parties can resolve their disputes with the help of neutral arbitrators or ICAO-appointed arbitrators. 

4. Have there been any instances? 

Chandele says that the onset and spread of the pandemic led many countries, including India, to resort to cutbacks and restrictions. This is also what led India to sign air bubble treaties with various countries last year.  

Even otherwise, during the times of standoff between two countries that have exchanged bilaterals or strain in economic or diplomatic relations between them, such measures may be adopted. 

However, in principle and even according to the National Civil Aviation Policy, the government wants to move towards a more liberalised environment with attempts at having an ‘open sky’ policy especially with South Asian Association for Regional Cooperation (SAARC) countries.

(Cover image courtesy Wikimedia Commons/John Taggart)