Air Transport Agreement Between the United State and India: Memorandum of Consultations

February 18, 2005


Representatives of the Government of the United States of America and the Government of India have reached an ad referendum agreement on the text of an Open Skies bilateral Air Transport Agreement (the "Agreement"), attached hereto, that would establish a new air transport relationship between the United States and India. The discussions were conducted in a positive and cordial atmosphere. Members of the two delegations are listed in Attachment A of this Memorandum.

The two delegations noted that the new Open Skies Agreement has the potential to spur greater trade, investment, tourism, and cultural exchange between the United States and India.

The Indian delegation expressed concern that the operation by carriers of one party of code sharing services with third-country carriers (pursuant to Article 8, paragraph 7 of the Agreement) might establish capacity entitlements for third-country carriers that exceed those contained in the air transport agreements between the other party and such third countries. In response, the United States delegation affirmed that code sharing services between the airlines of either Party and third-country carriers would not create an obligation for either Party to approve or permit the operation of capacity beyond that contained in the relevant aviation agreements with third countries.

Both delegations acknowledged that either Party may require airlines operating within its territory to submit to its aeronautical authorities statistics relating to the traffic carried on services provided under the Agreement. With respect to the safety article, the delegations reaffirmed their governments' obligations under Articles 16 and 33 of the Chicago Convention.

Both delegations noted their common understanding that the exercise of rights under Articles 8 and 9 of the Agreement must be in accordance with applicable domestic rules and regulations, provided that they are administered in a non-discriminatory fashion consistent with the purposes of the Agreement.

On the issues of change of gauge operations and operational flexibility, the Indian delegation expressed concern that the flexibility provided for in Annex I, Sections 2 and 3, and in Annex II, Section 1(B), would allow airlines to establish seventh-freedom operations that would not otherwise be permitted under the Agreement. The U.S. delegation emphasized that the provisions on change of gauge and operational flexibility are not intended to authorize airlines to exercise otherwise impermissible seventh-freedom rights and noted the specific requirement that such services necessarily involve a traffic stop in the territory of the Party designating the carrier. The two sides indicated that their respective aeronautical authorities intend to permit operations consistent with the terms of the Agreement on the basis of comity and reciprocity pending its entry into force.

For the Government of the United States of America:
Edward T. Smith
Office of Aviation Negotiations
U.S. Department of State

For the Government of India:
Raghu Menon
Joint Secretary 
Ministry of Civil Aviation


Washington, DC,
January 15, 2005