A security clearance for the board of directors is a prerequisite for AirAsia to receive a NoC from the aviation ministry to launch operations.
Air India fears the discounts are part of Etihad's long-term strategy of pulling fares down in order to capture a large chunk of Indian traffic.
The combined passenger share of erstwhile market leader Jet Airways shrunk further down to 22.6% in April from 23.8% in March.
Ajit Singh says the move was made keeping “passenger convenience” in mind as more foreign carriers would increase options for fliers.
A bilateral air service agreement is one whereby two nations allow their respective airlines to launch flights into each other's territory.
Air India feels that more foreign airlines will use this as a precedent to aggressively lobby for increasing their presence in the Indian market.
Local airlines and private airports are concerned over the sudden surge in seats and Etihad's access to new cities.
Industry experts say that passengers stand to benefit from the Jet-Etihad deal with lower fares, better connections and a wider choice of destinations.
Sources said the increase to be spread over a period of 3 years whereby, 11,000 seats will be added by Dec 2013 and 12,800 by next year.
Despite opposition to the proposal from powerful sections of the govt and Air India, the AAI believes this is the right way to go.
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