Airlines to move court if govt alters overseas flying rules
With the government set to take a final call on the national civil aviation policy, the battle between the FIA, which comprises of IndiGo, SpiceJet, Jet Airways and GoAir, and new startup airlines Vistara and AirAsia India, has further intensified.business Updated: Feb 24, 2016 02:48 IST
If the government brings an “inequitable” aviation policy that abolishes the 5/20 rule on flying abroad but retains the route dispersal guidelines (RDG), the Federation of Indian Airlines (FIA) will go to court.
“If the policy is inequitable we will have no choice (but to approach court),” IndiGo promoter Rahul Bhatia told HT.
With the government set to take a final call on the national civil aviation policy, the battle between the FIA, which comprises of IndiGo, SpiceJet, Jet Airways and GoAir, and new startup airlines Vistara and AirAsia India, has further intensified.
While the FIA wants the 5/20 rule, which bars airlines from starting international operations till they have a fleet of 20 aircraft and five years of domestic flying experience to stay, the Tata Group-backed Vistara and AirAsia India want it to be abolished.
“Unfortunately, 5/20 has always been seen in isolation and never in conjunction with RDG. If you say abolish 5/20 and RDG, we have no issues at all. But we cannot abolish 5/20 and not abolish RDG. That creates inequity in the arena and you would create two classes of airlines,” Bhatia said.
Under RDG, airlines are required to deploy a certain percentage of their total capacity in the North-East (NE), J-K, Andaman and Nicobar Islands and Lakshadweep.
“Basically what they are saying is that we cannot withdraw even one single flight from the NE, Ladakh and other areas and these guys can come and immediately start to fly overseas without this obligation on them. This creates a completely unlevel-playing field,” SpiceJet CMD Ajay Singh said.
“It means once you have built up a certain amount of operations in the last 8-10 years, whether it is 50 or 100 aircraft, it is now cast in stone and you cannot reduce it,” IndiGo president Aditya Ghosh said.
The new guy, he said, who has 5–10 planes has to deploy only 2-3 planes on these unviable routes, while he can go on and increase his fleet to 100 or 200. “Let’s make it truly free for all. But this sort of a reverse discrimination as opposed to protectionism is what we just cannot understand the logic of,” Ghosh said.
“These two applicants did not go through the scrutiny of the substantial ownership and effective control (SOEC) and they will fail that test even today because they are controlled by foreign carriers. You are trying to change the policy for someone whose very existence is under question,” Bhatia said.
Responding to Tata Group chairman emeritus Ratan Tata’s tweet that incumbent airlines were lobbying for protection and preferential treatment, Bhatia said: “How come he has not raised this issue before till his interest became vested in these two companies? How come he hasn’t raised this issue in the last 10 years?”
“We as Indian carriers are not able to operate an airline with the same level of control in those countries that are being allowed in ours. We cannot go and set up shop in Singapore and Malaysia with the same lack of effective control by their guys as they are being allowed in this country,” he said.
First Published: Feb 24, 2016 01:50 IST