Dogfight in the skies

New Delhi: The dogfight between older and newer airlines over the draft civil aviation policy unveiled in October last year - and reportedly now close to being finalised - could have been avoided had the government taken industry players into confidence on the changes it sought to introduce. The Federation of Indian Airlines (FIA), which has members who control over 90 per cent of the airline business, has on many occasions gone public with its grievance that the aviation ministry has not held a single meeting with them on the issue - a charge the ministry has not refuted so far. This reluctance to engage the major stakeholders is inexplicable and opens the route to all kinds of avoidable conjectures at a time when transparency is so important. Not that the FIA has covered itself in glory by making so-far-unverified allegations against two of the new airlines - which the FIA said were effectively controlled by their foreign partners in contravention of the existing rules. It is obvious that the FIA is using this as an excuse to block the proposed lifting of the foreign ownership cap of 49 per cent on domestic airlines.
The more substantive issue is the proposal to abolish the 5/20 rule that prohibits domestic airlines from flying overseas until they have operated for five years and acquired 20 aircraft. The rule itself is arbitrary; hence, the FIA's insistence on persisting with the scheme defies logic and seems motivated by a distaste for competition. Certainly, they were wronged earlier. But that can't be an excuse for opposing scrapping the rule just because it would benefit the newer airlines.
25/02/16 Business Standard

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Categories: Indian Aviation- In General Feb 2016