Government is considering diluting provisions to allow an Indian carrier to fly abroad but may want a new airline company to disclose its financial strength and possession of adequate liquidity to cover high operational costs, official sources said today.
There have been recent reports about certain business groups or even the government of Kerala planning to launch airlines to operate on international sectors.
However, the current regulations want an airline to have a fleet of 20 aircraft and five years of domestic flying before they can be allowed to fly abroad.
These provisions are now sought to be reviewed as part of a new comprehensive civil aviation policy framework, the sources said, adding a note is being prepared by the Civil Aviation Ministry to be taken up before the Union Cabinet.
The current regulations are being reviewed as the airline industry has maintained that even foreign start-up carriers have launched operations and were doing business in India.
In effect, the prevailing policy creates a competitive environment which puts Indian domestic carriers, which want to provide international services, at a disadvantage, they said.
So, while doing away with these "restrictive" norms, the new and incumbent airline companies could be asked to submit financial information which establishes their financial viability and illustrates how they plan to succeed in the aviation sector which is going through volatility and is known to be a business faced with multi-pronged risks.
The sources said that financial disclosures of potential airlines should demonstrate their knowledge of the aviation sector's dynamics and show that they possess adequate liquidity to cover aviation business start-up and initial operational costs.
