India to Lift Restrictions on Local Aviation
Tuesday, 4th February 2014 at 09:13am
Seeing its local aviation industry in dire need of reform, the Indian government is mulling to scrap another outdated aviation law that restricts local airlines from launching international flights if they don't meet the minimum requirement set forth by the government.
The outdated aviation law, the 5/20 in particular, has been frowned upon by local players as a deterrence to grow their business and some called it as anti-business.
The 5/20 law requires local airlines to operate at least 5 years within India and must have a fleet of no less than 20 aircraft before they are allowed to fly overseas.
The existing law must have been the reason why the Tata Group-AirAsia brainchild, AirAsia India, kept postponing its maiden service that would have seen the low-cost airline linking mostly southern Indian cities to Southeast Asia by now.
The Aviation Minister, Ajit Singh, has told the media recently that his office is in the process of framing a Cabinet resolution that would abolish the aforementioned law which has been in place for decades. The Minister was quoted as saying that the approval for the abolition of the 5/20 law would hopefully be acted upon as soon as possible.
Minister Singh said that he wants the Cabinet to approve the abolition sooner than the end of February when the country's general election code of conduct takes effect in its preparation for the general election before May this year.
Several aviation experts find the 5/20 law ridiculous and anachronistic. The law is said to be working against India to curtail the growth of its own airlines by restricting them to fly overseas. In contrast, foreign airlines, who own far fewer aircraft, can operate flights into India from their home country.
Tata Group and AirAsia Bhd of Malaysia has set up a new local subsidiary, AirAsia India, through their partnership inked early last year. It was originally planned to launch its maiden flights in the middle of 2013 but was postponed until December of the same year. Again, for undisclosed reason, the low-cost airline postponed anew its scheduled launch.
Industry analysts, however, surmised that the postponement must have been due to the country's local aviation law that prohibits airlines, among others, to fly overseas if the 5-year domestic operation and the 20-plane fleet are not met.
If the 5/20 law is finally abolished before the end of February, AirAsia India will definitely commence operations.
Other airlines such GoAir which has been in operations for 14 years and would have been already qualified to fly overseas but is unable to do so because it doesn't meet the fleet requirement. It has only 17 planes in its fleet.
AirAsia is eying India as a transit point for its planned operations out to the Gulf, Africa and China.
By: Pete Lee.