FM favours easing rules for airlines to fly abroad

Finance Minister P Chidambaram has supported Civil Aviation Minister Ajit Singh's suggestion on doing away with a rule that bars Indian carriers from flying abroad unless they complete five years of service and own a 20-aircraft fleet.

"If he (Ajit Singh) brings a paper to the Cabinet to throw out that rule (known as 5/20), I will support it strongly," he told a Washington audience. The minister was responding to a question on this provision, which the Centre for Asia Pacific Aviation (CAPA) in a recent report described as one of the "most damaging and discriminatory regulations."

Also read: Tough business takes a toll on airline CEO salaries

The aviation advisory and research firm had argued that the finances of several Indian carriers would have been stronger if they had been allowed to launch services on international routes earlier. Singh had expressed a similar view this past week.

"Last week, the Minister for Civil Aviation, Ajit Singh, made a statement that he is reviewing the 5/20 rule. According to him, it is an absurd rule. That is what he said," Chidambaram said in response to a question at the Carnegie Endowment for International Peace.

Singh had recently said that he plans to go to the Cabinet to review the 5-20 rule. Indian airlines with the exception of GoAir have been flying overseas after fulfilling these requirements, but changes in these norms are awaited by start-ups AirAsia India and Tata-Singapore Airlines.