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Air-India's tie-up with China to bring down fares

India's international carrier Air-India will soon sign a code-sharing agreement with the Chinese government to tap the booming air traffic between the United States and the Asian countries.

According to officials in the federal civil aviation ministry, a top-level team headed by A-I's managing director Probir Chandra Sen will visit Beijing on May 20-21 to finalise the strategic alliance with China's international carriers like China Air, China Eastern, Southern Western and China Northern.

However, the agreement will be primarily with China Air which has the largest number of aircraft -- 62 -- in that country. China Air's fleet includes a number of modern Boeing 777s and 747s and their capacity is eight times more than A-I's 26 aircraft.

Officials said the increasing number of travellers from Canada and the US -- most of whom are ethnic Indians—has led both the Chinese and Indian governments to negotiate the tie-up.

"We are unable to carry the growing air traffic from the US and Canada as AI has a small feet. But the code-sharing arrangement with China will help us capitalise on this traffic," a senior civil aviation ministry official told Rediff On The NeT.

For India, he said the air traffic will be primarily between New Delhi, Bombay and Beijing and the agreement will have a separate provision for flight frequency and capacity.

According to the details being worked out by the civil aviation ministry, China Air will carry passengers from the major cities in the US and Canada to Beijing and A-I will fly them from the Chinese capital to New Delhi or Bombay.

The Indian government is keen to offer this service to non resident Indians living in North America as the flight distance between the US and India is shortest via Beijing than Singapore, Hong Kong or Tokyo. "Once the accord with China comes into effect, we will be able to reduce air tariff to NRIs," an official said adding that the agreement will be similar to the one signed with France recently.

As per the pact between AI and Air France, the former will fly three times a week to Paris on the Bombay-Delhi-Paris route while the latter will operate seven flights to India every week. On the flights from Bombay and Delhi, the agreement provides for destinations out of Paris to Europe, North America and Africa. Air France will reach these destinations on tickets issued by AI.

The frequency of flights from Beijing to India and from Bombay/New Delhi to the Chinese capital as well as India's preferred destinations in the US, where China Air operates, will be finalised when officials of both countries meet.

But ministry officials fear the tie-up will annoy the Singapore government as China Air will cut into Singapore Airlines's business. Singapore is the preferred stop-over of many travellers bound for India from the US West Coast.

Singapore is already unhappy with India over the rejection of the ambitious Tata-Singapore Airlines project by the civil aviation ministry headed by Chand Mahal Ibrahim.

However, Prime Minister Inder Kumar Gujral is said to be keen on finalising the accord with China immediately as he expects it could herald better neighbourly relations between the two countries. The prime minister is expected to visit China in October for a bilateral dialogue with the Chinese government on a host of issues including defence, trade and commerce.

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