Cabinet clears game-changer aviation policy, tweaks 5/20 rule - Firstpost
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Cabinet clears game-changer aviation policy, tweaks 5/20 rule

  Updated: Jun 15, 2016 13:40 IST

#5/20 rule   #AirAsia   #civil aviation policy   #Ratan Tata   #Vistara  

New Delhi: India's cabinet on Wednesday cleared a new civil aviation policy with some changes in the rules that allow carriers to fly abroad, besides measures to promote regional connectivity and boost cargo operations, sources said.

"The cabinet has cleared it. Yes, some changes have been made (in the draft policy circulated for opinion from stakeholders). The minister will brief you later today," a senior aviation ministry official said, declining further comment.



The policy seeks to create an eco-system to handle 300 million domestic passengers by 2022 and 500 million by 2027, and 200 million international travellers by 2027. India had seen 139.32 million domestic and over 50 million international air travellers in 2014-15.

As per the civil aviation policy, the government has decided to scrap the minimum five years requirement, provided the airline needs to allocate 20 aircraft or 20 percent of their total fleet of aircraft, whichever is higher, to the domestic sector if they wish to fly overseas.

At present, an airline requires five years of operations and 20 aircrafts in its fleet to go on international routes.

The new rule would particularly favour Tatas-backed Vistara and AirAsia India, who had repeatedly said in the past that the 5/20 rule, in its present form, would hurt the interest of the aviation sector as it stifles the growth prospects of any new airline.

In February, Tata Group Chairman Emeritus Ratan Tata had accused older carriers of lobbying and using “monopolistic pressures” to retain preferential treatment under the 5/20 rule which sparked a war of words between the older and new airlines, Business Standard report said.

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