New Delhi: An open sky policy without removing the 5/20 rule, which bars Indian airlines from flying abroad without five years experience in the domestic segment and a fleet of 20 aircraft, is likely to benefit incumbent players such as Jet Airways and Air India and be detrimental to new carriers such as Air Asia and Vistara.
The draft aviation policy, released last week, proposes to allow unlimited civilian flights - on a reciprocal basis - from countries that are more than 5,000 km, or seven hours' of flying time away. This will result in unlimited flights by foreign airlines to and from Europe and the US. The move will benefit Air India and Jet Airways as they have large craft capable of flying on such long routes.
However, the lack of clarity on the rule that bars new domestic airlines from flying abroad will prevent players such as Vistara and AirAsia from taking advantage of the change in policy. This will also postpone investments by these cash-rich airlines. The draft policy suggests that the 5/20 rule can continue, or be abolished, or be replaced, with domestic flying credits.
AirAsia India CEO Mittu Chandilya said the removal of the rule "would have unbridled the entire sector and shown optimism not only to current incumbents but also to potential future investors".
According to Kapil Kaul of global aviation consultancy CAPA, a policy that promotes open access for foreign airlines and is closed for Indian carriers is not realistic.
02/11/15 Jayati Ghose/Telegraph
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The draft aviation policy, released last week, proposes to allow unlimited civilian flights - on a reciprocal basis - from countries that are more than 5,000 km, or seven hours' of flying time away. This will result in unlimited flights by foreign airlines to and from Europe and the US. The move will benefit Air India and Jet Airways as they have large craft capable of flying on such long routes.
However, the lack of clarity on the rule that bars new domestic airlines from flying abroad will prevent players such as Vistara and AirAsia from taking advantage of the change in policy. This will also postpone investments by these cash-rich airlines. The draft policy suggests that the 5/20 rule can continue, or be abolished, or be replaced, with domestic flying credits.
AirAsia India CEO Mittu Chandilya said the removal of the rule "would have unbridled the entire sector and shown optimism not only to current incumbents but also to potential future investors".
According to Kapil Kaul of global aviation consultancy CAPA, a policy that promotes open access for foreign airlines and is closed for Indian carriers is not realistic.
02/11/15 Jayati Ghose/Telegraph
