20/5 rule to fly abroad not needed: Aviation minister Ajit Singh - Times of India

The author has posted comments on this articleSaurabh Sinha, TNN | Sep 24, 2013, 05.57AM IST

NEW DELHI: India is finally set to end the discrimination its airlines have faced to fly abroad, even as the red carpet was rolled out for foreign carriers to fly into the country. Aviation minister Ajit Singh has told TOI that the twin conditions that an Indian airline must be five years old and have 20 aircraft in its fleet to start overseas flights are both "unreasonable and not needed".

"This rule was wrong and possibly manipulated in the first place. The 20/5 conditions are not required. Indian airports need to become aviation hubs and our airlines should not face such restriction in flying abroad when foreign airlines do not face any such conditions," Singh said. The change comes as India is set to have a new low-cost carrier AirAsia India and a full service carrier Tata-Singapore Airlines.

The ministe r pointed out that Indian corporate leaders with one or two private planes can fly abroad whereas scheduled carriers face such hurdles. At present, Indian carriers' market share in international air travel to and from the country is about 33%. Singh said with strong players like Tatas entering the airline sector, share of Indian carriers in international travel should be allowed to go up fast by removing unnecessary hurdles.

"There is no technical reason in asking our airlines to comply with the 20/5 rule to fly abroad. It is simply not good for the Indian airline industry. Air India and the proposed Tata-Singapore Airlines can mount longhaul flights directly from India and help our airports become hubs fast," Singh said. The change in the 20/5 rule will need to be cleared by the Cabinet.

In the past few years, the Gulf has emerged as the biggest transit hub for traffic between India and the West. Similarly, Southeast Asian cities have become the biggest transit points for traffic between India and the East and right up to the west coast of America.

Now, with India's cashstrapped airline industry finally getting strong players like Tatas, Singapore Airlines, AirAsia and Jet-Etihad, the minister is hoping that desi carriers will be able to give a fight to those hubs. The airline industry, for instance, expects Tata-SIA to mount long-haul flights to the West from Delhi and other Indian metros.

The 20/5 rule is held largely responsible for the sorry financial state of many Indian carriers. In April 2007, Jet Airways's promoter Naresh Goyal bought Air Sahara for Rs 1,450 crore to be the only private Indian carrier that flew abroad. Two months later, Vijay Mallya, promoter of Kingfisher Airlines that was launched in 2005, decided to pick up a 26% stake in Air Deccan for Rs 550 crore to ensure that his airline could fly abroad on the licence of the low-cost carrier that met the 20/5 rule. While Kingfisher succumbed to this expensive purchase and subsequent losses, Jet still suffers serious strain on its books due to that expensive buy.

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