United Airlines is suspending a marketing agreement with Jet Airways (India) Ltd. (JETIN) after U.S. regulators cut the Asian nation’s aviation-safety ranking for the first time.

The downgrade by the Federal Aviation Administration bars Indian carriers from starting new service to the U.S. and opens up their planes for additional inspections in the U.S. Officials acted because India hasn’t fixed safety deficiencies found in earlier assessments, the FAA said yesterday in a statement.

United said hours after the FAA announcement that it had halted the use of its booking codes on Jet Airways flights, a practice that lets fliers arrange a seamless trip on jets from both carriers. The move takes effect today, and passengers are being rebooked, Chicago-based parent United Continental Holdings Inc. (UAL) said in an e-mailed statement.

United’s action marked some of the first fallout from the FAA designating India as Category 2 from Category 1, the same standing as Zimbabwe, Paraguay and Indonesia. That was a blow to India’s bid to boost the aviation industry after Prime Minister Manmohan Singh’s government eased investment rules and spent billions of dollars to upgrade more than a dozen airports.

FULL ARTICLE: This also includes AA.
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