Sunday, February 21, 2016

Ratan Tata speaks out against incumbent airlines opposing abolition of 5/20 rule

Ratan Tata, chairman emeritus of Tata Sons, came out publicly against Indian airlines lobbying to keep a rule that bars new carriers from starting international flights unless they have been flying for five years and have 20 planes. He said this smacked of protectionism and had no place in an open economy.
"In the airline industry in India it is sad to see the incumbent airlines lobbying for protection and preferential treatment for themselves against the new airlines which have been formed in full compliance with prevailing govt policy and providing air transport to Indian citizens in line with the dream of 'New India' promoted by the new government under Mr Narendra Modi's leadership," Tata said in a post on his Twitter account.
The Tata group is an investor in two of India's newest carriers — AirAsia India and Vistara — along with AirAsia Bhd and Singapore Airlines, respectively. Tata's views found support from AirAsia founder Tony Fernandes. In a series of tweets that hailed Tata as 'honest, clean, smart, brave' and a 'great world leader', Fernandes asked "would you trust him (Tata) or some of the guys wanting 5/20?" Tata didn't name any airline in his statement. India's older carriers— Go Air, SpiceJet, IndiGo and Jet Airways—voice their collective opinion and dissent through the Federation of Indian Airlines ( FIA) lobby group and are opposed to the abolition of the 5/20 norm.
"The lobbying for discriminating policies between old and new airlines is reminiscent of the protectionist and monopolistic pressures by vested interest entities who seem to fear competition, as in a variety of other sectors over the years," Tata said. "These protectionist moves have held back progress in India compared to open economies that have thrived on competition overseas."
22/02/16 Anirban Chowdhury & Mihir Mishra/Economic Times

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