New Government To Go Over Local Aviation Law

Thursday, 15th May 2014 at 07:15am

The new government of Prime Minster Narendra Modi, who assumed on May 26, 2014, is expected to review the controversial issue that has been the stumbling block of most Indian airlines�"the 5/20 rule of the aviation law.

In this so-called 5/20 rule, a local airline is required to operate for at least 5 years in the country and need to keep at least 20 aircraft in its fleet before it can fly to international destinations. The two provisions must be complied together.

The law is regarded by many, especially by industry analysts, as a hindrance to the development of India's aviation industry.

Last March, a note was sent to the Cabinet hoping the issue will be taken up. Unfortunately, the Cabinet failed to do so. Since the aviation law was ratified by the Union Cabinet, it is also the Cabinet itself who has the power to modify or scrap any provisions in the law.

The launch of operation by Tata-SIA Airline, the joint venture between Tata Group and Singapore Airlines, has been stalled indefinitely partly due to the law that restricts it from flying outside India.

The full-service airline initially has no plans of operating flights within India as it is already a crowded market. It is originally eyeing for the lucrative business travel market between India and outside world.

However, the airline has a change of heart and has applied for a license to operate to start domestic operations, hopefully by September this year. It is planning to launch its inaugural flights from its hub-to-be Delhi, to Mumbai, Bengaluru, Goa, Hyderabad, Chandigarh, Srinagar, and Patna. It will operate as many as 87 flights each year, increasing it to 301 on its fourth year. It will use a fleet of leased A320 aircraft in its maiden operations.

DGCA has already published a notice to the public in order to know if there are any objections coming from any group or individual against the granting of a license to Tata-SIA Airline.

Earlier, the industry regulator awarded AirAsia India its license to fly, after over a year since the airline submitted its application. The petition filed by a group of existing local airlines seeking AirAsia's disqualification, was rejected by the regulating body, mainly due to lack of merits.

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