Mumbai: International air traffic from India could cross the 100 million mark by 2021 if changes are made to the current rule that debars airlines from flying abroad unless they complete five years of service, according to a report by Centre for Asia Pacific Aviation (CAPA).
Terming the rule, known as 5/20 in aviation parlance, as one of the “most damaging and discriminatory regulations’’, the aviation advisory and research firm argues that the financials of several Indian carriers would have been stronger if they were allowed to launch international routes earlier.
The 5/20 rule, which also requires airlines to have a fleet of at least 20 aircraft, does not apply to foreign carriers owing to which they have captured a larger share of the international market at the expense of home carriers.
“It could also be argued that Kingfisher’s demise can be traced back to the challenges associated with the integration of Air Deccan, an acquisition that was motivated by the desire to circumvent the 5/20 rule,” the report said.
07/10/13 Adith Charlie/Business Line
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Terming the rule, known as 5/20 in aviation parlance, as one of the “most damaging and discriminatory regulations’’, the aviation advisory and research firm argues that the financials of several Indian carriers would have been stronger if they were allowed to launch international routes earlier.
The 5/20 rule, which also requires airlines to have a fleet of at least 20 aircraft, does not apply to foreign carriers owing to which they have captured a larger share of the international market at the expense of home carriers.
“It could also be argued that Kingfisher’s demise can be traced back to the challenges associated with the integration of Air Deccan, an acquisition that was motivated by the desire to circumvent the 5/20 rule,” the report said.
07/10/13 Adith Charlie/Business Line
