No consensus yet between govt and airline operators on removal of 5/20 rule

The government has given domestic airlines one more week to come up with final suggestions on the removal of the 5/20 rule and subsequent changes to the route dispersal guidelines (RDGs). This comes after a meeting between airline officials and civil aviation ministry officials on Wednesday failed to yield a consensus. 

The 5/20 rule, which allows domestic airlines to fly overseas only after five years of operations and after they have a fleet of 20 aircraft, has long been a subject of contention within the industry. The aviation minister, P Ashok Gajapathi Raju has said the rule is archaic, and new airlines such as Vistara and AirAsia, are also batting for its removal. 
 

But, incumbents such as GoAir and IndiGo, led by industry association Federation of Indian Airlines (FIA), have said the rule should stay both because it has helped in developing regional air connectivity, and because its removal will give newer players an unfair advantage. Flying overseas will give new players access to cheaper fuel and higher paying passengers.

“Airlines have been given one more week to submit their response after they sought more time from us today,” a government official said, after a meeting attended by all seven carriers, Air India, Jet Airways, GoAir, IndiGo, SpiceJet, AirAsia and Vistara.

Both FIA and Vistara have already submitted their responses. “The Federation of Indian Airlines (FIA) on behalf of its member airlines strongly recommend that the current regime of 5/20 and RDG be continued as is, with minimal changes as recommended in the enclosed submission to ensure continued servicing of National Interests,” the letter sent by FIA to the ministry said.
 

The aviation ministry has suggested linking the removal of the 5/20 rule to the RDGs (1994), which mandates airlines to deploy 10% capacity on remote Category II destinations like Andaman & Nicobar Islands. As per the ministry proposal, the 5/20 rule can be brought down to 1/5, where new airlines can fly overseas only after one year of operations and with a fleet of five aircraft. The ministry has suggested that airlines looking to fly overseas will have to collect credits by connecting regional/remote regions at home. These credits can be enchased on international routes.
 

The ministry wants to includes the revised RDGs under the new civil aviation policy that is expected to be announced by end-February.