Genesis advises Indian airline in battle for air traffic rights allocation

The problem of scarce resource is at the centre of economics. It is with this problem in mind, and in particular the scarcity of international air traffic rights, that Go Air, and Indian air carrier, approached Genesis to provide an independent economic report on the appropriate allocation of air traffic rights.

Go Air approached Genesis to undertake this analysis as it was in the process of challenging the methodology and process of the allocation of air traffic rights in India.

Genesis sought to provide clarity to Go Air on the international best practices used for the allocation of international air rights, as well as a clear overview of the key economic principles that should be used to dictate the allocation of scarce resource more generally.

Based on extensive research of international best practices, Genesis was able to provide an analysis that identified the key economic principles for international air rights allocation. Across those countries with an existing framework of regulations that governs this process it was clear that the key focus for allocation of air rights was on (i) the reasonable capability of air carriers to operate a specific route, and (ii) the ability of air carriers to increase the public benefit (normally through increased competition).

Genesis put forward a framework of recommendations on a suitable methodology and allocation criteria. The framework argued that there was a strong case for a change away from the current, simplified methodology that favours national air carriers and larger domestic air carrier operations, to a system that focuses on maximising the benefits created by the aviation sector by allowing for efficient and pro-competitive allocation, and use of air traffic rights.

These recommendations served as a key input into the legal filings submitted by Go Air to the Indian authorities.