New Delhi: The government on Wednesday said that it is giving final touches to the country’s maiden civil aviation policy and other key guidelines for the sector.
According to a senior civil aviation ministry official, the maiden policy and the subsequent revision or scrapping of the 5/20 compliance rule for airlines are in the final stages of completion.
“In a months time, we should submit the policy for approval by the competent authorities,” the senior official said.
The ministry had been criticised for the delays in the introduction of the policy, whose draft was presented last year. The government also came under fire for its indecisiveness over the continuation of the contagious 5/20 compliance rule.
“The matter regarding the 5/20 rule will be resolved, once the policy is submitted. We have been consulting all the stakeholders, as there are many divergent views regarding the rule,” the official said.
The 5/20 compliance rule mandates a domestic airlines to have a minimum fleet of 20 aircraft and 5 years of operational experience before it can start international services.
Recently, the ministry had proposed a new system in place of the 5/20 compliance rule which would require airlines to accrue domestic flying credits (DFC) by servicing tier-I, II and III cities.
The airline under the new system would require to earn a minimum of 200 crore DFCs in one years time and need to have at least five aircraft in its fleet. The domestic passenger carrier’s would be allowed to buy DFCs from other airlines, as well.
However, any relaxation of the compliance rule is being stiffly resisted by older airlines which cite huge losses on account of meeting the stringent norms.
Whereas, other industry stakeholders claim that the rule has greatly disadvantaged Indian passenger carriers as they have lost out to international competition from the Gulf countries.
Sector based experts also cite another interesting example of the negative impact of the 5/20 compliance rule in the demise of Kingfisher Airlines.
Many analysts attributed the airlines demise to the compliance rule, as Kingfisher bought Air Deccan to leverage its longer history of operations and launch international services almost two years earlier than it would have been able to do on its own right.
However, the decision is cited as the start of the passenger carrier’s financial woes which finally resulted in its bankruptcy.
Earlier, in an exclusive interview with IANS, the Civil Aviation Minister Ashok Gajapathi Raju said that the decision to impose the 5/20 compliance rule was taken by the union cabinet and that the matter will go back to it for further consideration.
“The rule was passed by the cabinet decision of a certain government. Thus, it has to go back to the cabinet for further consideration,” Raju said.