Indian carriers such as the National Aviation Co. of India Ltd-run Air India and Jet Airways (India) Ltd will now be able to start new services to the US and also expand pending commercial agreements with US carriers.

The US Federal Aviation Authority, or FAA, has allowed India to retain its safety credentials, bringing relief to the industry and lifting the threat against travel agreements that had been awaiting the audit to take effect.

It has been decided to keep India category 1. The FAA audit is now complete, said civil aviation secretary M. Madhavan Nambiar, announcing the decision after both sides signed the agreement. We are now on a level playing field.

Indian carriers such as the National Aviation Co. of India Ltd-run Air India and Jet Airways (India) Ltd will now be able to start new services to the US and also expand pending commercial agreements with US carriers. The audit concluded on Wednesday.

A four-member FAA team was in India this week to complete a final audit of its Indian counterpart, the Directorate General of Civil Aviation (DGCA), on safety oversight after the International Civil Aviation Organization, or Icao, found India lacking in around 70 areas, including shortage of flight safety inspectors and other technical personnel.

Since the review began earlier this year, there have been no new direct India-US flights. Nor have any new code-share agreements been approved between carriers of the two nations.

Jet Airways and Air India connect cities in the US and have sought expansion of code-share agreements with US carriers such as United Airlines and US Airways. This will now be permitted following the conclusion of the audit.

A downgrade in the safety standards rating to so-called category II would have prevented new services by Indian carriers to the US. Once placed in category II, no new code-share agreements would have been allowed. Climbing back to category I could have taken years. Israel was downgraded to category II late last year by FAA. It definitely gives us a comfort level, Nambiar said.

Director general of civil aviation Nasim Zaidi said the stumbling blockairlines not being allowed to expand commercial agreements or increase flightswill now be considered by their (US) law and the conditions which would have applied with a downgrade would not apply any more. This would not come in their (airlines) way (anymore), he said.

Code sharing refers to a ticket marketing practice among airlines that allows carriers to share the two characters in codes used in airline reservation systems. This helps customers purchase a single ticket on a journey that has two flights such as a New Delhi-London leg and a London-New York on two different airlines.

Air India, as Mint reported this month, was planning to expand its New York flights from New Delhi and Mumbai to Washington and Boston, respectively. Codes shares would be critical to such expansion.

It suggests that DGCA took the ICAO audit and identified violations seriously and adequately addressed them, said Vikram Krishnan, associate partner at Oliver Wyman, an international aviation consultancy. DGCA instituted an additional safety oversight infrastructure in response to the 2006 ICAO audit, which was the appropriate thing to do

This included the appointment of flight operations inspectors, taking their number to 32, approving 560 technical positions and 150 non-technical positions, and hiring of technical officers on short-term contracts, DGCA said in a statement on Wednesday. It empowered regional offices and started surveillance checks on airlines. Of 4,327 surveillance activities scheduled for this year, 2,545 were conducted by August.

Zaidi said several of the positions that have been approved will be aggressively filled over the next one-two years.

Air India welcomed the move. Its a postive development and has the potential of helping Air India as the countrys national carrier which has significant presence in the US, said executive director Jitender Bhargava. The airline operates daily services to New York, Newark and Chicago including daily non-stop Mumbai-New York and Delhi-New York flights. Jet Airways flies daily from Mumbai, Delhi and Chennai to New York and Newark via its hub in Brussels.