AI changes stand on 5/20 rule to allow airlines to fly abroad

In an apparent change of stance over the much-debated 5/20 norm, state-run Air India now is of the view that national interest should be the criteria for the Government when it decides on either retaining or scrapping the rule to allow Indian carriers to fly overseas.
The airline has submitted its new position on the 5/20 norm to the Civil Aviation Ministry, which has to take a final call on the issue before sending it to the Union Cabinet for approval, sources said.
Under the rule popularly called 5/20, a domestic carrier is allowed to fly abroad only after completing five years of domestic operations and having a minimum of 20 aircraft fleet.

Air India's latest stand on the issue has come under the new Chairman and Managing Director Ashwani Lohani. It had earlier taken the position, along with other airlines like Jet Airways, that status quo should be maintained on the matter. It had opposed any tweaking of the norm on the ground that it would "sound death knell" for the national carrier.
"The sudden withdrawal of the protection of 5/20 rule, might be the proverbial last nail in the national carrier's coffin without bringing any significant benefit to the nation...In this background, Air India would recommend that the Government while rationalising the 5/20 rule may adopt a pragmatic, simple but cautious policy, based on a duel criteria of safety and extent of domestic operations," former Air India CMD Rohit Nandan had written to the Ministry in January last year.

Significantly, two start-up carriers--AirAsia India and Vistara, which have investments from Tata group, are lobbying for removal of 5/20 rule and allowing them to fly abroad even as established players under their umbrella organisation , Federation of Indian Airlines (FIA) have opposed any change.

When asked about the rentals of these floors, Rao said it
varies from Rs 300 to 450 a square feet. On the rental income side, he said it should cross Rs 100 crore now.
Meanwhile, chairman and managing director Ashwani Lohani, who was roped-in six months ago to turn around the airline, expressed confidence to meet the March 2019 deadline, saying "we are well on track".

Whether the airline will be able to report standalone profit in FY16 on the back of the massive drop in fuel bills, he said "unlikely", but refused to offer any reason.
"We'll surely be Editda positive this year. But I am not sure of reporting profit for the full fiscal this year," Lohani told reporters today, adding that the airline has not paid back any of its working capital loans this year so far.
Strangely, all the domestic airlines have been reporting record profits this year, boosted by cheap oil, which fell more than 70 per cent since June 2014.

Lohani also parried a question on the revenue growth so far in the current fiscal year.
Whether the airline will be able to conclude any more real estate monetisation plan this fiscal, Lohani answered in the negative without offering any specific reasons.
Lohani was in town to open a new ticketing counter at the AI Towers here today.
When asked why AI, which is sitting on a debt of over Rs 30,000 crore in air-craft purchase loans alone, is wasting money on refurbishing physical booking counters, he said booking counters will always remain though the future of booking is in the online space.

He said already 18-20 per cent bookings are done through the official website and the rest is through a mix of physical as well as online travel portals and agents. Refusing to offer a break-up of physical bookings, he said around Rs 60 crore worth bookings are done manually every month.
On the outcome of the probe into the death of a technician who got killed after getting sucked into the engine recently, Lohani said AI is not probing the incident, but the regulator is.
He parried a question on whether the airline has replied to NHRC on the accident.