IndiGo Ordered to Terminate Lease Agreement with Turkish Airlines

IndiGo Ordered to Terminate Lease Agreement with Turkish Airlines 

Why in News? 

The Indian government recently instructed IndiGo to end its aircraft lease pact with Turkish Airlines. The Directorate General of Civil Aviation (DGCA) issued the directive to end this agreement after granting an additional three-month extension.

• IndiGo had requested permission to operate these aircraft until November 2025, but the DGCA rejected that request.

IndiGo and Turkish Airlines Partnership

• IndiGo began leasing aircraft from Turkish Airlines as part of a collaboration started in 2023.
• Under this agreement, based on the Damp Lease model, Turkish Airlines provides aircraft, their pilots, and some crew members to IndiGo.
• Both airlines currently operate under a codeshare agreement. IndiGo handles booking, ground handling, and ticketing responsibilities. This model helps IndiGo operate on international routes without significant investment.
• Through this, IndiGo offers services on nearly 40 international routes using Turkish Airlines’ flights. This allows Indian passengers to travel to many parts of Europe, America, and Asia at lower costs.
• IndiGo is allowed to use wide-body aircraft of Turkish Airlines, which have larger capacity. This enables IndiGo to carry more passengers to international destinations in a single flight.
• IndiGo has taken two Boeing 777-300ER aircraft on damp lease from Turkish Airlines. The leased aircraft serve IndiGo’s Delhi and Mumbai routes to Istanbul.

Why was IndiGo asked to terminate the lease agreement with Turkish Airlines?

• Turkey-Pakistan Cooperation: In recent years, Turkey has supported Pakistan through military equipment and training. During operations like ‘Operation Sindoor’, when India faced tensions with Pakistan, Turkey’s role was viewed with suspicion by India. 
• Risk to Air Sovereignty: In a damp lease model, key responsibilities of India’s air services come under foreign control. This directly affects India’s air sovereignty and self-reliance. In the event of political or military tension, foreign elements could influence India’s strategic aviation operations.
• Strategic Move: The government aims to reduce Indian carriers’ reliance on foreign assets for long-distance flights. It now discourages long-term strategic agreements with foreign carriers, especially in sensitive areas. National security is being prioritized, and foreign influence is being limited.

India-Turkey Air Services Agreement

• A bilateral air services agreement is in place between India and Turkey, allowing a total of 56 weekly flights between the two nations.
• Of these, 28 flights can operate from India to Turkey, and the other 28 from Turkey to India.
• The purpose of this agreement is to maintain a balanced air transport link between the two countries, facilitating smooth passenger and trade operations.
• There is no restriction on the number of seats. Airlines can book as many seats as desired as long as the number of flights remains within the agreed limit.
• This arrangement gives airlines greater freedom in commercial operations. It also increases competition and gives passengers more choices.
• Through this agreement, both countries have offered a platform for commercial cooperation between airlines.

IndiGo Ordered to Terminate Lease Agreement with Turkish Airlines – 

About Air Transport Agreement (Air Services Agreement)

• • Introduction:
    • An Air Transport Agreement (ATA), sometimes referred to as Air Services Agreement (ASA), is a bilateral agreement between two countries.
    • The main purpose of such an agreement is to allow international commercial air services. Without such agreements, no airline can start services to another country.
    • These agreements allow airlines to operate on specified routes, carry passengers and cargo, and grant various economic and operational rights.
    • All ATA and ASA agreements should be registered in ICAO’s DAGMAR database.
      • However, this registration is not always fully updated or universal, as many governments prefer to keep these agreements confidential.
  • Background:
    • The legal foundation of air transport agreements was laid during the 1944 Chicago Convention. 
      • The Chicago Convention laid the foundation for creating the International Civil Aviation Organization (ICAO).
    • It includes several Annexes related to aviation safety, airworthiness, environmental protection, and airport facilities.
    • France and Germany signed the earliest known air agreement in 1913, allowing airship operations.
    • Post World War II, global consensus grew to formalize international aviation agreements.
    • This led to the signing of the Bermuda Agreement in 1946 between the UK and the US.
      • This agreement implemented key policies related to routes, fares, and operations.

• Key Rights under Air Transport Agreements:

• Frequency: How often flights can operate.
• Designated Airlines: Which airlines can provide services.
• Origin, Intermediate, and Destination Points.
• Traffic Rights: Permission to carry passengers and cargo between countries.
• Type of Aircraft: Which aircraft can fly on the route.
• Provisions related to taxes and charges.

India’s Bilateral Air Services Agreements

• India has formalized air service arrangements with 116 countries worldwide.
• These agreements have made it easier to operate international air services.
• Their goal is to enhance air connectivity, trade, tourism, and diplomatic relations between India and other countries.
• India follows the policy that a foreign airline can fly from any international airport in India, but only if that location is listed as a Call Point in the agreement.
• India is cautious in allowing new non-metro airports as call points to maintain balance in favor of Indian airlines.
• Under these agreements, designated Indian airlines like Air India, IndiGo, and Vistara are allowed to operate from any international airport in India without needing separate permission.
• The countries with which India has ASAs include major developed nations like the USA, UK, France, Germany, Japan, and emerging nations like Bangladesh, Sri Lanka, Brazil, Kenya, Vietnam, etc.
• Under the 2016 Civil Aviation Policy, India implemented an Open Sky Policy.
  • This policy aims to create a free and open market in the aviation sector. The goal is to make international flights easier and turn India into a global air traffic hub.
  • The Open Sky Policy aims to promote growth, competition, and convenience in air services.
  • Under this arrangement, India’s six major metro airports—Delhi, Mumbai, Kolkata, Chennai, Hyderabad, and Bengaluru—are given special privileges.
  • These airports allow unlimited flights beyond traditional bilateral rights. 
  • In 2022, India signed new agreements under the Open Sky Policy with Maldives and Canada. 
  • In 2023, New Zealand was added to India’s Open Sky framework, widening access.