By IANS
New Delhi : In a move to encourage smaller airlines, the government has decided that those with seven services or less to India may be exempted from the Mandated Commercial Agreement with effect from Jan 1, parliament was informed Thursday.
In a written reply, Minister for Civil Aviation Praful Patel told the Lok Sabha that the new system is expected to bring about a level playing field between the national carriers and foreign carriers on international operations.
In December 2004, it was decided that all existing Government Mandated Commercial Agreements would be reviewed and phased out over the next five years and all new operations by foreign carriers, both on new destinations as well as on existing routes would be free from the obligations of Mandated Commercial Agreement.
Asked whether this move would bring down air fares, the minister said air fares were determined by market forces though it would be reasonable to expect that the airlines would be in a position to lower the fares once the Mandated Commercial Agreements ceased to exist.