Private airlines’ body raises concerns over 5/20 rule

By: | Published: March 10, 2016 12:00 AM

In another round of meetings held at the aviation ministry on Wednesday, chaired by civil aviation minister Ashok Gajapathi Raju, Federation of Indian Airlines (FIA) raised concerns about abolishing the 5/20 rule.

In another round of meetings held at the aviation ministry on Wednesday, chaired by civil aviation minister Ashok Gajapathi Raju, Federation of Indian Airlines (FIA) raised concerns about abolishing the 5/20 rule. FIA contended that abolishing the 5/20 rule will have a negative impact on domestic connectivity and services which will lead to a hike in airfares. FIA also raised concerns over the issue of substantial ownership and effective control and auctioning of unused bilateral rights.

The meeting assumes importance as the civil aviation ministry is almost at the final stages of preparing a draft note which is to be sent to the cabinet for approval before the end of the month. Sources say that ministry has still not taken a decision on the fate of the 5/20 rule.

“The 5/20 rule and route dispersal guidelines go hand in hand, in order to ensure a level-playing field if the ministry abolishes the 5/20 rule then it should also abolish RDG,” a source requesting anonymity told Fe. “We are also opposing auctioning of unused bilateral rights, because they are the sovereign rights of the the country and most importantly it does exist anywhere else in the world,” the source added.

The 5/20 rule requires an Indian airline to have a minimum five years of domestic flying experience and a fleet of at least 20 planes to fly overseas. The FIA, which comprises Jet Airways, SpiceJet, IndiGo and GoAir, claims to represent more than 90% of the domestic airlines industry and contends that the rule should remain if the the ministry wants better domestic connectivity.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition