Easier flights abroad likely for local airlines, to benefit AirAsia, Tata-SIA

Written by fe Bureau | New Delhi | Updated: Jan 15 2014, 14:13pm hrs
Air AsiaAirAsia India, where the Tata Group is a partner, also wants to develop India as a hub for international travel.
In what could benefit new airlines in India like AirAsia and Tata-SIA, the government may soon scrap a rule that currently restricts domestic airlines with less than five years of operation and with lower than 20 aircraft to fly international routes.

Civil aviation minister Ajit Singh said on Tuesday that a Cabinet note, expected to be prepared before February-end, will pave the way to do away with the restrictive policy.

The Cabinet note is being prepared, we hope to clear it soon. The present rule is restrictive and unnecessary and it will be scrapped. Once its scrapped there will be nothing restrictive for domestic airlines to operate on international sectors. If operators qualify for operating on domestic sectors as per norms set by DGCA, they would be able to fly international, he said.

The move to remove the 5/20 rule, which has already received support from finance minister P Chidambaram, will largely benefit GoAir, Tata-SIA and AirAsia. The last two will start operations within this year. Airlines would be able to reduce fuel costs by refuelling in other nearby countries, while improving fleet utilisation.

Tata Sons, which recently invested $100 million in a full-service airline JV with Singapore Airline, has indicated its willingness to operate international flights from India.

Meanwhile, AirAsia India, where the Tata Group is a partner, also wants to develop India as a hub for international travel. Coupled with the recent lowering of FDI cap on the aviation sector, relaxation of the 5/20 rule may also encourage more global airlines to invest in India.

Govt mulls lifting ban on Airbus A380s

New Delhi, Jan 14: The government is considering lifting a ban on Airbus SAS A380s from flying into the country, a move that may benefit Emirates and Deutsche Lufthansa AG (LHA) to start services with the double-decker plane to the Asian nation.

Weve been looking at it and weve talked to the airlines and asked for comments from ground-handling and immigration, aviation minister Ajit Singh said. We are waiting for their comments. The government banned commercial services with the worlds biggest passenger aircraft on concerns travellers will desert Air India. Reuters