Cabinet likely to lift hurdles to operate flights abroad, Tata-Singapore Airlines, AirAsia to benefit

Written by ENS Economic Bureau | New Delhi | Updated: Mar 6 2014, 15:00pm hrs
Tata-SIA dealThe aviation industry in India has been pushing for the abolition of minimum eligibility criteria for airlines to fly abroad.
In what will come as big boost for the Tata-Singapore Airlines proposal for an India-based carrier and AirAsias proposed joint venture airline, the Cabinet is likely to do away with a restrictive eligibility criteria for Indian airlines to fly overseas.

In its last meeting, likely to be held on Wednesday, the Cabinet may discuss the proposal to abolish the current norms that require an airline to have five years of flying and also have a fleet of 20 aircraft in order to be eligible to fly abroad.

The aviation industry in India has been pushing for the abolition of this minimum eligibility criteria since no such norms exists in any other country. Hence, an international airline can start flights to India from the first day of its operations and even with one aircraft but the Indian counterparts have to wait for five years.

AirAsia CEO Tony Fernandes had alleged that the eligibility norm for foreign flying must have been put to protect one of the existing private carriers. The Competition Commission of India had also advocated the abolition of the minimum eligibility criteria for Indian carriers to launch international services and said that the rule was acting as an impediment for the Indian aviation sector. The primary beneficiaries of the move would be the two new airlines being launched in India - AirAsia India by AirAsia along with Tata Sons and Arun Bhatia of Telestra Tradeplace as equity partners, and the other by Tata Sons in partnership with Singapore Airlines (SIA).

With the abolition of this norm, the two airlines can start international operations from day one. Both AirAsia and SIA have a huge international presence and their tie ups in India would be able to leverage their network to provide the best of connectivity to the Indian consumer.

The abolition of this rule will also benefit GoAir, which has completed five years of operations but does not have a fleet of 20 aircraft yet.

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