http://www.financialexpress.com/fe_full_story.php?content_id=136190

Foreign destinations not far 
 
CORPORATE BUREAU
Posted online: Friday, August 04, 2006 at 0000 hours IST
 
       
 
 
MUMBAI, AUG 3 :  The dream of new Indian carriers to fly to foreign destinations may soon be fulfilled. The current stipulation of completing five years of domestic operations before a carrier can be allowed to operate on international routes may be relaxed, according to ministry of civil aviation sources. The ministry is planning to relax the clause by reducing the timeframe to three years.
The existing clause states that only domestic carriers with a fleet of a minimum 20 aircraft and operating in the domestic sector for five years will be allowed to fly on foreign routes. The policy was originally formed as a measure to check the capability of domestic carriers before they fly internally. However, industry analysts feel the measure is taken to safeguard the interest of state-run carriers Air-India and Indian Airlines. An A-I executive confirmed, “If all private carriers are allowed to fly overseas then it will hit our revenue.”

However, new entrants are experimenting novel ways to fly to foreign destinations even as the stipulation remains unchanged. Vijay Mallya-promoted Kingfisher Airlines has floated a subsidiary named Kingfisher Airline Inc in the US to operate flights from US to India. This company is owned 75% by Mallya. Kingfisher Airlines recently placed an order for the ultra long-haul A340-500, capable of flying non-stop from India to the US. This recent order begins the countdown to the imminent commencement of international operations by Kingfisher Airlines.

Low-cost carrier Air Deccan has also chalked out similar plans by following a hub-and-spoke model. The company’s subsidiary Deccan Lanka will facilitate operating flights from Sri Lanka to other destinations. Initially, the airline will connect Colombo to the southern Indian cities of Trivandrum, Madurai, Coimbatore, Cochin and Trichi.

But the lure of the international turf may not be all that rosy. Jet Airways, which currently flies to five foreign destinations, including Singapore and London, has incurred a loss of $38 million in its international operations in 2005-06. Even Air Sahara is operating flights to Singapore, Colombo and Kathmandu but has also lined up 92 inter-line partners for foreign routes. Competition from foreign carriers and low yields on international routes have hampered their ambitious plans for venturing out to newer destinations since both the carriers are yet to break even on their international routes.