New Delhi : Coming out strongly against Ratan Tata’s pitch to scrap 5/20 norm for airlines, the grouping of four established carriers FIA said removal of the rule would lead to higher airfares and result in “reverse discrimination”, reports PTI.
In a united voice, the top honchos of SpiceJet, IndiGo, GoAir and Jet Airways under the umbrella of Federation of Indian Airlines (FIA) asserted that 5/20 rule is not protectionist.
FIA’s remarks comes days after Tata Group Chairman Emeritus Ratan Tata publicly hit out at older carriers accusing them of lobbying and using “monopolistic pressures” to retain preferential treatment under the controversial 5/20 rule that bars overseas flying by new airlines.
Upping the ante against the proposal to allow start up carriers to fly overseas without complying with 5/20 norm, FIA warned that doing away with the norm would push airfares higher.
“If the 5/20 norm is removed, domestic fares will go up as airlines will deploy capacity (aircraft) on international routes which will also create more overseas hubs,” IndiGo President Aditya Ghosh said.
Along with SpiceJet’s CMD Ajay Singh and senior executives of Jet Airways and GoAir, Ghosh emphasised that level playing field should be ensured for all domestic airlines.
Under 5/20 rule, only local airlines having five years of domestic operations and at least a fleet of 20 aircraft can fly overseas.
This makes the two Tata group-invested airlines — AirAsia India and Vistara — ineligible for international operations.
Apparently rebutting Tata’s assertion that 5/20 norm is protectionist, Ghosh said that if the government wanted to remove the rule then the existing route dispersal guidelines (RDGs) too should be done away with.
Under RDGs, local carriers are compulsorily required to operate flights to certain regional and remote areas such as the North East region.
“It (5/20 rule) is not protectionist. Rather removal of 5/20 without the simultaneous removal of RDGs would be reverse discrimination,” the IndiGo chief said.
The 5/20 norm and RDGs should be seen in conjunction and not in isolation, Ghosh noted.
Scrapping of 5/20 rule is one of the proposals made by the Ministry in the draft civil aviation policy, which is in the advanced stage of finalisation.