As 5/20 flying rule drags on, civil aviation min to hold another 'informal' meeting on policy

New Delhi: Intense lobbying by incumbent airlines against any move to ease overseas flying restrictions may have miffed the Tatas and civil aviation experts but it has achieved one thing: the Civil Aviation Policy is once again delayed as ministers of the Modi government try and understand the intense objections to any such move.

The draft policy has been in the public domain for months. But its passage is further delayed now after recent statements by the Federation of Indian Airlines (FIA) - this lobby group of incumbent airlines has made various allegations, even threatened court action if the 5/20 rule is removed.



This rule bars airlines from flying overseas unless they have completed five years of domestic operations and have a fleet of 20 aircraft. Incumbents - Jet Airways, IndiGo, SpiceJet, GoAir - want this rule to stay whereas new airlines Vistara and AirAsia India (in both Tatas have equity stakes) want the rule to be abolished.

A senior official in the ministry of civil aviation said there is intense "Manthan" or churning within the government over a decision on the 5/20 rule. He said after the intense lobbying by incumbent airlines made headlines recently where some decision makers have sought additional clarifications on the rule.

Civil Aviation Minister A Gajapathi Raju told Firstpost another "informal" meeting of ministers is expected on the policy. Last month, the first such meeting was held under the chairmanship of Home Minister Rajnath Singh and it was attended by the two ministers of civil aviation besides ministers of road transport and highways, railways, defence and skill development.

Raju said today that only after the ministers' meet will the civil aviation policy be sent for inter-ministerial consultations and thereafter taken to the Cabinet. Though the ministry of civil aviation today set itself a deadline of March end for the policy to get to the Cabinet, this seems a little tough to achieve.

We have said earlier that there is no plea which could lend support to the incumbent airlines' plea to keep the 5/20 restriction. Today, senior ministry officials also rubbished claims by the FIA that the lobby group has not been granted meetings to sort out this issue. Secretary R N Choubey said the airlines were given two dates in December to send in their representatives.

"We do not send out letters to promoters of airlines but wrote to the FIA. Who they choose as their representatives is their call," he said when asked why airline promoters were not called for meetings. He also reiterated that the FIA has sent two batches of written communication to the ministry on the subject so where was the question of not including this body in consultations?

We have suffered, so should others. This seems to be the guiding principle of incumbent airlines which made various dire pronouncements to select media last month about the fate of the Indian aviation industry in case the 5/20 restriction is lifted. Some of these predictions are plain silly, others seem to be part of a tactic to divert attention from key issues.

All incumbent airlines have been constrained by the 5/20 restriction which came into force during UPA I and now can't bear to see the two new airlines, Vistara and AirAsia India, get permission to fly overseas without the mandatory five-year domestic grind. Tata Sons is an equity investor in both the airlines and the 5/20 fracas has pitted the incumbents against the Tatas.

Ratan Tata set the cat among the pigeons by becoming vocal, for the first time, on 5/20 removal with his tweets last month. This lead incumbent airlines to step up attacks against Vistara and AirAsia India, with media reports quoting one airline promoter threatening to drag the entire matter to the court, another wanting a link between 5/20 removal and existing norms on providing domestic connectivity to remote areas whereas a third speaking of imminent rise in air fares, under-utilisation of airport infrastructure if the 5/20 restriction were indeed to be abolished.

The incumbents have already knocked several doors including the PMO's, with allegations that the norms of substantial ownership and effective control were being violated by both the Tata airlines. Singapore Airlines owns 49% of Vistara whereas AirAsia BhD owns 49% in AirAsia India.

The senior ministry official quoted earlier pointed out that there is no question of removing or relaxing RDG - Route Dispersal Guidlines - which mandate how much of an airline's capacity on trunk routes is to be deployed on less viable routes within the country. In simple words, this rule mandates that an airline must deploy 10% of its available seat kilometers (ASKMs) on category II routes, 2% on category IIA and so on. The official explained that this requirement is only a function of an airline's capacity on trunk routes and the airline's liability decreases as it reduces capacity on trunk routes.

What this means is if, theoretically speaking, an existing airline were to withdraw its operations from all trunk routes in the country (the high density routes like Delhi-Mumbai), it would have no obligation to comply with RDG norms either. The official pointed out that incumbents were wrong in alleging that if RDG norms continued even after 5/20 removal, this would distort a level playing field. He also said the tweaking of RDG norms proposed in the draft policy was only meant to clarify categorisation of category I routes.

As we have said in these pieces earlier, the 5/20 restriction was a UPA legacy which needs to be removed.

The Civil Aviation Policy proposes many changes like creation of an entire infrastructure for enhancing regional connectivity. It should not be held ransom to demands of a few airlines over a single rule, however powerful they may be. If ministers of the Modi government need more meetings to understand the issues at hand on 5/20, let them have these meetings. But any misgivings on its removal should be laid at rest and the rule should be consigned to history.

Updated Date: Mar 02, 2016 15:10 PM

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