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U.S. threatens to ban Vande Bharat Mission - A look at the Air Transport Agreement 2005 between India and U.S.

The world is in the midst of a global pandemic which has caused a blow to the world economy. The Covid19 pandemic began from China thereby spreading to other parts of the world resulting in the closing of international borders by most of the countries of the world to prevent the spread of covid19 at a global stage whilst battling it in their own countries. The international airlines have suffered huge losses due to the closure of international borders.

In India, the Directorate General of Civil Aviation (DGCA) had announced on March 19th that no international commercial passenger flight operation would take place from 23rd March and that order is extended till 30th June. However to bring home the Indian nationals who were stranded abroad due to the Covid19 pandemic, the Indian Government initiated the Vande Bharat Mission. India significantly ramped up flights to the US and Canada in the second and third phases of Vande Bharat Mission to bring back stranded citizens, including students and professionals who lost their jobs because of the economic fallout of the pandemic.[1] But recently, U.S. has threatened to ban Air India services under Vande Bharat Mission.

The U.S. administration has passed an order stating that Air India will be required to obtain prior approval of U.S. department of transport before operating any Third and/or Fourth Freedom charter flights to or from the United States. The order also directed Air India to file applications for authorisation for repatriation flights at least 30 days before the date of the proposed flight.

The U.S. alleges that Indian Government has engaged in discriminatory treatment to American airlines by not allowing similar repatriation flights to be operated in India thereby putting American flights at a competitive disadvantage. The U.S. also stated that the Vande Bharat Mission was putting American airlines at a competitive disadvantage and it also allegedly amounted to violation of Air Services Agreement of 2005 signed between India and U.S.

A look at the Air Transport Agreement 2005:

The Air Transport Agreement also known as Air Services Agreement was signed between the Governments of India and U.S. on 14th April 2005. The agreement focused on the rights of the parties and limits of operation with respect to air travel between them.

Article 2 of the agreement states, Grant of Rights:

  1. Each Party grants to the other Party the following rights for the conduct of international air transportation by the airlines of the other Party:
    1. the right to fly across its territory without landing;
    2. the right to make stops in its territory for non-traffic purposes; and
    3. the rights otherwise specified in this Agreement.
  2. Nothing in this Article shall be deemed to confer on the airline or airlines of one Party the rights to take on board, in the territory of the other Party, passengers, their baggage, cargo, or mail carried for compensation and destined for another point in the territory of that other Party.

Article 5 of the agreement with respect to application of laws states:

  1. While entering, within, or leaving the territory of one Party, its laws and regulations relating to the operation and navigation of aircraft shall be complied with by the other Partys airlines.
  2. While entering, within, or leaving the territory of one Party, its laws and regulations relating to the admission to or departure from its territory of passengers, crew or cargo on aircraft (including regulations relating to entry, clearance, aviation security, immigration, passports, customs and quarantine or, in the case of mail, postal regulations) shall be complied with by, or on behalf of, such passengers, crew or cargo of the other Partys airlines.

Article 8 of the agreement provides with respect to commercial opportunities as follows:

  1. The airlines of each Party shall have the right to establish offices in the territory of the other Party for the promotion and sale of air transportation.
  2. The designated airlines of each Party shall be entitled, in accordance with the laws and regulations of the other Party relating to entry, residence, and employment, to bring in and maintain in the territory of the other Party managerial, sales, technical, operational, and other specialist staff required for the provision of air transportation.
  3. Each designated airline shall have the right to perform its own ground-handling in the territory of the other Party (self-handling) or, at its option, select among competing agents for such services in whole or in part. The rights shall be subject only to physical constraints resulting from considerations of airport safety. Where such considerations preclude self-handling, ground services shall be available on an equal basis to all airlines; charges shall be based on the costs of services provided; and such services shall be comparable to the kind and quality of services as if self-handling were possible.
  4. Any airline of each Party may engage in the sale of air transportation in the territory of the other Party directly and, at the airlines discretion, through its agents, except as may be specifically provided by the charter regulations of the country in which the charter originates that relate to the protection of passenger funds, and passenger cancellation and refund rights . Each airline shall have the right to sell such transportation, and any person shall be free to purchase such transportation, in the currency of that territory or in freely convertible currencies.
  5. Each airline shall have the right to convert and remit to its country, on demand, local revenues in excess of sums locally disbursed . Conversion and remittance shall be permitted promptly without restrictions or taxation in respect thereof at the rate of exchange applicable to current transactions and remittance on the date the carrier makes the initial application for remittance.
  6. The airlines of each Party shall be permitted to pay for local expenses, including purchases of fuel, in the territory of the other Party in local currency. At their discretion, the airlines of each Party may pay for such expenses in the territory of the other Party in freely convertible currencies according to local currency regulation.
  7. In operating or holding out the authorized services on the agreed routes, any designated airline of one Party may enter into cooperative marketing arrangements such as blocked space, code-sharing or leasing arrangements, with a) an airline or airlines of either Party ; b) an airline or airlines of a third country ; and c) a surface transportation provider of any country ; provided that all participants in such arrangements (i) hold the appropriate authority and (ii) meet the requirements normally applied to such arrangements.
  8. Notwithstanding any other provision of this Agreement, airlines and indirect providers of cargo transportation of both Parties shall be permitted, without restriction, to employ in connection with international air transportation any surface transportation for cargo to or from any points in the territories of the Parties or in third countries, including transport to and from all airports with customs facilities, and including, where applicable, the right to transport cargo in bond under applicable laws and regulations.

    Such cargo, whether moving by surface or by air, shall have access to airport customs processing and facilities. Airlines may elect to perform their own surface transportation or to provide it through arrangements with other surface carriers, including surface transportation operated by other airlines and indirect providers of cargo air transportation. Such intermodal cargo services may be offered at a single, through price for the air and surface transportation combined, provided that shippers are not misled as to the facts concerning such transportation.

Article 11 of the agreement provides for fair competition as under:

  1. Each Party shall allow a fair and equal opportunity for the designated airlines of both Parties to compete in providing the international air transportation governed by this Agreement.
  2. Each Party shall allow each designated airline to determine the frequency and capacity of the international air transportation it offers based upon commercial considerations in the marketplace. Consistent with this right, neither Party shall unilaterally limit the volume of traffic, frequency or regularity of service, or the aircraft type or types operated by the designated airlines of the other Party, except as may be required for customs, technical, operational, or environmental reasons under uniform conditions consistent with Article 15 of the Convention.
  3. Neither Party shall impose on the other Partys designated airlines a first-refusal requirement, uplift ratio, 13 no-objection fee, or any other requirement with respect to capacity, frequency or traffic that would be inconsistent with the purposes of this Agreement.
  4. Neither Party shall require the filing of schedules, programs for charter flights, or operational plans by airlines of the other Party for approval, except as may be required on a non-discriminatory basis to enforce the uniform conditions foreseen by paragraph 2 of this Article or as may be specifically authorized in an Annex to this Agreement. If a Party requires filings for information purposes, it shall minimize the administrative burdens of filing requirements and procedures on air transportation intermediaries and on designated airlines of the other Party.

Section 1 of Annex II titled Charter Air Transportation provides the right of the parties t to carry international charter traffic of passengers (and their accompanying baggage) and/or cargo (including, but not limited to, freight forwarder, split, and combination (passenger/cargo) charters), between any point or points in the territory of the Party that has designated the airline and any point or points in the territory of the other Party.

The U.S. alleges that India has acted in violation of Article 11 of the Agreement which provides for fair competition stating that not allowing American airlines to operate repatriation flights in India is discriminatory and puts the American airlines at a competitive disadvantage.

The way forward:
Amidst this, a spokesperson of the Ministry of Civil Aviation said:
As we contemplate further opening up in response to demands, we are looking at the prospect of establishing individual bilateral bubbles-India-U.S., India-France, India-Germany, India-U.K. These are all destinations where demand for travel has not diminished.

Final decisions pursuant to negotiations are expected to be taken soon. India is likely to enter into bilateral agreements with the U.S., U.K., France and Germany to restart international air travel. The government is discussing a template known as travel bubble, which permits relatively unrestricted and risk-free travel between two countries positioned similarly vis a vis the spread of Covid19.[2]

As soon as international travel is resumed with U.S., the restriction laid on Vande Bharat mission would no longer hold validity as commercial international travel would be in accordance to the agreement in relation to the travel bubble template signed with U.S. So efforts should be made to reopen international travel so as soon as possible.

The world is facing a difficult time amidst the Covid19 pandemic and there is a need to stabilize the world economy as soon as possible. The United Nations chief has correctly criticised the total lack of international coordination in tackling the Covid19 pandemic and warned that the go-it-alone policy of many countries will not defeat the coronavirus.

I agree with the view of Mr. Guterres that its important to use that fact to make countries understand that bringing them together, putting together their capacities, not only in fighting the pandemic in a coordinated way but in working together to have the treatments, testing mechanisms, the vaccines accessible to everybody, that this is the way we defeat the pandemic.[3] The world needs to join forces and fight this pandemic together. India and U.S. needs to solve its differences relating to international travel and focus on resuming commercial international flights subject to conditions and restrictions to prevent the spread of the virus.

  1. US imposes restrictions on Vande Bharat Mission repatriation flights, 23rd June 2020, Hindustan Times
  2. India plans international flights, The Hindu, 24th June 2020
  3. UN chief criticises lack of global cooperation on tackling COVID-19, The Hindu, 24th June 2020 covid-19/article31902717.ece

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