Ratan Tata wants 5/20 out hits out

airasia

Tata Group chairman emeritus Ratan Tata has lashed out at the older Indian airlines that have been lobbying extensively with the government against the removal of the 5/20 aviation rule which bars carriers from starting international operations till they have a fleet of 20 aircraft and five years of domestic flying experience.

Tata tweeted that he was sad to see the “incumbent airlines lobbying for protection and preferential treatment” drawing a sharp response from Ajay Singh, chairman and managing director, SpiceJet who questioned why Tata Group-backed Vistara and AirAsia India should get special dispensation when all Indian carriers had operated domestically for five years before beginning international operations.

The Federation of Indian Airlines (FIA), which comprises of IndiGo, SpiceJet, Jet Airways and GoAir, want the rule to stay, while Vistara and AirAsia India want it to be abolished. Besides Tata’s, Singapore Airlines is the other stakeholder in Vistara while AirAsia and Arun Bhatia of Telestra Tradeplace Pvt. Ltd. partner them in AirAsia India.

Air India, which till recently opposed the abolition of the rule, has withdrawn its opposition to the abolition of the rule.

“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 government policy and providing air transport to Indian citizens in line with the dream of a ‘New India’ promoted by the new government under Mr Modi’s leadership,” Tata said.

“The lobbying for discriminating policies between old and new airlines is reminiscent of the protectionist and monopolistic pressures by vested interests’ entities who seem to fear competition, as in a variety of other sectors over the years,” he said.

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“The minister of civil aviation and the ministry needs to be applauded for considering the removal of the controversial 5/20 rule. One hopes when the new policy is introduced, it will be free of discrimination and protectionism so that Indian aviation can grow for the benefit of consumer and the common man — and not to serve the interests of select beneficiaries of protectionism,” Tata said.

Countering Tata, Singh said, “All of us were asked to serve our great country before we got profitable rights to fly abroad. What is wrong if these two foreign-controlled airlines are also asked to serve India before being allowed to fly international? Mr Tata, whom we respect greatly, should in fact urge these airlines in which his group is a shareholder, to serve India willingly before being allowed to fly international.”

“While obtaining a licence, these two airlines had undertaken to follow the 5/20 rule, a rule they are now opposing so vehemently. It is also evident that these airlines are controlled by their foreign parents. This is in complete violation of Indian laws that require airlines in India to be effectively controlled by Indian shareholders. Mr Tata should urge these airlines to follow Indian law in letter and spirit. No country in the world, including Singapore and Malaysia, allows its airlines to be controlled by foreign airlines. If Indian airlines like SpiceJet and IndiGo are not allowed in these countries, why should they be allowed to control airlines in India?” Singh questioned.

FIA representatives had on February 17 met Jitendra Singh, minister of state, PMO, to complain that some Indian carriers (Vistara and AirAsia India) are being “effectively controlled” by their foreign parent airline. They had earlier briefed Mahesh Sharma, MoS, aviation on the issue.

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