Draft aviation rules for domestic airlines to fly outside is an “Artificial Barrier”: AirAsia India

By: | Updated: January 28, 2016 8:38 PM

Rules that mandate domestic carriers to gain some experience before they could be given approvals to fly to foreign countries is an “artificial barrier” to aviation companies, according to AirAsia India chairman S. Ramadorai.

AirAsia, AirAsia india, arun bhatia, arun bhatia AirAsia, AirAsia state of affairsAirAsia India is a joint venture company between Tata Sons Ltd., Telestra Tradeplace Pvt. Ltd., and AirAsia. (Reuters)

Rules that mandate domestic carriers to gain some experience before they could be given approvals to fly to foreign countries is an “artificial barrier” to aviation companies, according to AirAsia India chairman S. Ramadorai.

”We don’t know why the 5/20 rule came, just because two from the same group came, two different models; one low cost model and other is full service model. You cant blame us saying that these are the two guys who want it, third person comes you also let him have it, fourth person comes you also have it, I think its a very artificial barrier,” Ramadorai, chairman of AirAsia India said while speaking at the Idea Exchange at the Express Office in Noida on Thursday.

Ramadorai said the choice of should be left to the market forces, competition and the traveller to decide where they want to decide and derive best value for the money they spend on their flight tickets. “We have the sustaining power. Some talk about domestic flying credits not clear.”

AirAsia India is a joint venture company between Tata Sons Ltd., Telestra Tradeplace Pvt. Ltd., and AirAsia. The low-cost carrier focusses on first time air travellers and currently operates six planes from its base in Bangalore to Chennai, Kochi and Goa, Jaipur and Chandigarh. Apart from this joint venture, Tata Sons also has a joint venture with Singapore International Airlines and operates the Vistara airline.

Ramadorai said the business model of the two airline companies were differently. AirAsia India is for the first time travellers while Vistara is a full-fare carrier. “We are not saying that we are taking away the market share from somebody,” he said.

In October last year, the government unveiled the draft civil aviation policy, in a bid to ease the rules governing the sector and propel its future growth. But the draft policy left some contentious issues unclarified, including one on a rule called 5/20, wherein an Indian airline to have a fleet of 20 aircraft and five years of operational experience to fly to international destinations.

Instead, the draft policy gave alternatives to that rule by seeking to either retain it, or abolish it, and also an option to rework domestic flying credits formula to earn and maintain 300 such credits to start flights to destinations among the SAARC region, and countries beyond 5,000 kilometers radius of New Delhi.

Commenting on other proposals to auction routes and subsidising travel for smaller cities and towns, Ramadorai, said the government should allow market forces to determine as some of the issues such as aviation fuel taxes are controlled by the state government, while some other issues were operational in nature. “The rules of the game is desegregation and let the market forces decide what is the best price.”

Ramadorai, who is also the chairman of the National Skills Development Corporation, said in India, skilling the youth in the country, is a “scale problem” and implementation has to happen at the local level.

The NSDC was set up in 2008 to o promote skill development by catalyzing creation of large, quality, for-profit vocational institutions, to help crore of unemployed and under-employed youth in the country to get trained and get into mainstream jobs, mostly in vocational streams. As per the 12th five year plan, of the now-defunct Planning Commission, the country needed to train and place at least 8 million every year. “We are far from the target,” Ramadorai said, adding the NSDC plan is a long-term mission.

Ramadorai said that the NSDC is now working on bringing in National Occupation Standards by which it will determine the curriculum with help of sector-specific skill councils, which will allow institutions to offer certifications to the people trained through such organisations, he said. The certification of skill sets will be mandatory in the next five years. “We want to link to the wages,” Ramadorai added.

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