Federation of Indian Airlines (FIA), the grouping of four established domestic carriers today criticised the lobbying by two Tata Sons – invested airlines – Vistara an AirAsia India – for removal of 5/20 norm, saying it was in the “self-interest and not in “national interest” of the two carriers.
Last Sunday, Ratan Tata had said that established carriers were using “monopolistic pressures” to retain “preferential treatment” under the 5/20 rule. Under the rule, only local airlines having five years of domestic operations and at least a fleet of 20 aircraft can fly overseas.
“FIA is deeply disturbed by the statements issued by Tata claiming to be in national interest but effectively in self-interest,” FIA said in a statement today.
“They (Vistara and AirAsia) claim to be ‘Indian’ Airlines and so it is puzzling that they now do not wish to serve the Indian civil aviation growth story be a part of India’s future growth. They only wish to, it appears, serve their self-interest and establish themselves in India in order to fly International,” it said.
AirAsia India and Vistara — two airlines operated by the Tatas through joint ventures — are currently ineligible to operate overseas under the 5/20 norm.
Scrapping of 5/20 rule is one of the proposals made by the Ministry in the draft civil aviation policy, which is in the advanced stage of finalisation. Significantly, the proposal to do away with the 5/20 norm was mooted around the time Tata Group announced its re-entry in the domestic airlines industry in 2013.
“Tata (Group) is a 51 per cent shareholder in Vistara while in Air Asia India it is the main Indian shareholder. When the airlines received ‘their approvals’, currently under challenge in the courts, they were aware of the 5/20 and Route Dispersal Guidelines (RDGs) rule. These rules were made primarily to ensure passenger growth in India, improve connectivity across the country, and serve the geo political and remote out lying areas of our country,” the FIA, which comprises Jet Airways, SpiceJet, IndiGo and GoAir, said.
Under RDGs, local carriers are compulsorily required to operate flights to certain regional and remote areas of the country.
FIA which represents 95 per cent of domestic civil
aviation industry (excluding Air India) have in their submissions made to the Civil Aviation ministry, the Minister of State in PMO and other cabinet Ministers stated that “in fact it is the proposed new policy that discriminates against 95 per cent of the Industry and seems to serve only the new start-ups, Vistara and Air Asia, promoted by Tatas,” it said.
“As stated in our submissions we have drawn the government’s repeated attention that the intention of these airlines is to serve their own financial and strategic interests, namely to fly international, to expand their international network in order to fuel their growth using India as a base,” the FIA alleged.