The aviation ministry Wednesday proposed to scrap the 5/20 rule for flying to overseas destinations which will enable new airlines to fly on international routes. However, it placed some riders to protect the interest of established airlines.
The ministry wants to do away with the 5/20 rule which states that airlines with five years of experience and 20 aircraft can only fly abroad.
New airlines, however, will be allowed to fly international for over six hour flight. The new system also involves earning domestic flying credits that may give some protection to the existing airlines.
As per the proposal, new airlines will be barred from flying to Gulf and Southeast Asia. For flying to these destinations, these airlines will need 600 DFCs (Digital Flying Credits).
This makes AirAsia and Vistara ineligible to benefit from the proposed regulation.
Explaining the mechanism, Mittu Chandilya, CEO, AirAsia (India) said the company will take at least 2-2.5 years to get credits to fly on international routes.
AirAsia (India), the joint venture of Air Asia Berhad, Tata Sons holding and Telestra Tradeplace plans to focus more on domestic market, said Chandilya, adding that the airline is looking at building a sustainable business model.
AirAsia is likely to have different strategies for domestic and international markets.
Centre for Asia Pacific Aviation (CAPA) CEO Kapil Kaul is disappointed with this proposal as it is quite complex and needs some clarity. He hopes better sense prevails in the ministry and it dismantles the 5/20 rule completely.
The government must review this proposal and should come up with something more logical, he concluded.
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