Tata Sons, the Indian holdings company that maintains joint ventures with Air Asia and Singapore Airlines for Air Asia India and Vistara respectively, has voiced its opposition to India’s 5/20 rule.
The rule prevents India-based airlines from launching overseas services until they have a fleet of at least 20 aircraft and have operated flights for more than five years. According to Tata Sons, this law makes the aviation market skewed in favour of foreign carriers and should be abolished.
"The 5/20 rule has thus far principally benefited only foreign airlines, who have captured 70 per cent of the international traffic from India, taking Indian jobs and revenue with them," the company said in a statement.
“The removal of the rule is estimated to boost international traffic to and from India to over 100 million passengers by 2021 and will stimulate the domestic market. Increased competition within the country will further contribute to lower [fare] prices and greater accessibility of air travel to common people."
Tata Sons was responding to claims made earlier this week by the Federation of Indian Airlines (FIA), which represents Indigo, Jet Airways, Spice Jet and Go Air, that a previous statement by Tata Group chairman Ratan Tata advocating open skies in India was actually in self-interest.
"[Tata’s statement] claims to be in the national interest but is effectively in self-interest,” the FIA said. "The policy that is now being advocated serves only the parochial limited interest of two international airlines and their Indian partner.”
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Clement Huang
