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India Approves Revised Air Services Agreement With UAE

by Lorys Charalambous Tax-News.com, Cyprus

03 December 2008


India's government has announced that it has approved the signing of a new air services agreement (ASA) between India and the United Arab Emirates (UAE).

This new agreement will supersede the existing ASA, which was signed between India and the UAE on March 21, 1989.

Keeping in view the recent developments in the civil aviation sector, and with a view to modernize and update the existing ASA, bilateral air services consultations between the two countries were held in Dubai on February 5, 2008.

Some of the main features of the proposed ASA include:

  • Both countries will be entitled to designate any number of airlines for operation of mutually agreed services for which the respective country shall grant appropriate authorization and permission;
  • Either country may revoke, suspend and limit the operating authorization or the technical permission of an airline designated by the other country if specified conditions are not upheld;
  • Both countries will follow the obligations to protect the security of civil aviation against acts of unlawful interference;
  • The designated airline of either party may enter into cooperative marketing arrangements like code share or commercial arrangements;
  • The designated airlines of the two countries shall have fair and equal opportunity to operate the agreed services on specified routes, and
  • The designated airlines will be free to decide tariffs in respect of the agreed services at reasonable levels based on the commercial considerations. The designated airlines of both the countries shall not be required to agree on the fares to be applied.

However, each Party will have the right to intervene so as to:

  • Prevent tariffs whose application constitutes anti-competitive behaviour which has or is likely to have the effect of crippling a competitor or excluding a competitor from a route;
  • Protect consensus from tariffs that are excessive or restrictive due to the abuse of a dominant position; and
  • Protect airlines from tariffs that are predatory or artificially low.

The revised agreement signifies an important landmark in the civil aviation relations between India and the UAE and has the potential to spur greater trade, investment, tourism and cultural exchange between the two countries.

The agreement will be signed on behalf of the two countries after approval by the respective governments.


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