 "Domestic airlines set to get stronger wings")
Under the existing rules, the Indian carriers wanting to fly on international routes need to have a fleet of at least 20 aircraft and must have operated for at least five years. Civil Aviation Minister Ajit Singh on Tuesday said his ministry was in the process of framing a Cabinet note to seek government approval for "scrapping" the regulation within a month.
"The 5/20 norm for flying international will be completely abolished. We are preparing a Cabinet note on this. Since everything needs to be completed before February-end (when the code of conduct for the general elections comes into force), we will do it before that," Singh said.
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This proposal has already been endorsed by Finance Minister P Chidambaram, who had said in Washington in October that he would support the move if the civil aviation ministry moved a Cabinet note to amend the rules.
"The 5/20 rule is anachronistic, discriminatory and anti-competition… It works against Indian carriers' interest. Today, a one-day-old airline registered abroad with a one-aircraft fleet can fly into India, no holds barred. The scrapping of the rule will add to the attractiveness of the Indian aviation sector," said Amber Dubey, partner & head (aerospace and defence), KPMG.
The move will benefit Tata-SIA and AirAsia (both are expected to start operations this year), besides GoAir (stands to gain as the regulation will help it improve its fleet utilisation).
Tata Sons, which tied up with Singapore Airline (SIA) in September last year to launch a full-service carrier in India, with an initial investment of $100 million, has said it will want to operate international flights from India if it gets a government approval.
Tony Fernandes, CEO of AirAsia, another Tata Sons joint ventures, has also been vocal in his criticism of the 5/20 rule. In a media briefing in New Delhi in July last year, Fernandes had said the rule made no sense and that India was the only country where such a rule existed. "A one-plane operation like AirAsia Malaysia can fly into India, but an airline with (less than) 20 planes cannot fly out. That's a disadvantage to the (Indian) airline."
AirAsia has evinced interest in developing India as a hub for international travel. "India is strategically located. And we can operate flights from the southern part of the country, within a four-hour circle, to destinations in Africa and on the Gulf routes like Doha, Nairobi, Maldives, Karachi, Bangladesh and some Chinese cities. It is bizarre that the government has a regulation in place, which allows (only) airlines with five years of operations and a fleet of 20 aircraft to fly international. It does not make sense. Probably, Naresh (Jet Airways Chairman Goyal) or someone put it down," Fernandes had said.
GoAir CEO Giorgio de Roni had told Business Standard his airline was looking to fly international if it received regulatory approval. "We already fly our aircraft 13.5 hours a day and, if we have to improve productivity, we need to fly at nights as well. The idea is to improve utilisation by flying on international routes. The Gulf is a possibility."
The airline would have a fleet of 19 aircraft by February 2014 and is looking at a waiver of the 5/20 rule to start foreign operations. In addition to abolition of the 5/20 rule, the ministry is also looking at a proposal to allow A380 planes to land at Indian airports. A change in rules could also benefit carriers like Singapore Airlines, Emirates, Lufthansa and British Airways, which operate A380s and fly to India.