The draft aviation policy has several pluses, such as focus on low-cost airports and MRO services, but new, low-cost airlines are unhappy with the stand on 5/20.

Bloomberg TV India caught up with AirAsia India MD and CEO Mittu Chandilya to get an insight on this.

There was a lot of anticipation with this policy, but it leaves a little to be desired, doesn’t it? As far as the 5/20 rule goes, they have gone ahead and said that it is going to be abolished but it is all marked to the domestic credits. How are you really looking at that? A little disappointed?

Look, anytime there is a policy that is re-looked by the government, by the ministry, by the regulators, I think it’s always a very progressive thing. It is going to have a positive impact on us as airline operators, as the government, as even travellers and passengers.

So it goes without saying that I think it’s a good move. There are rules that need to be looked at.

I think the one notable exception is the 5/20 rule. There seems to be a lack of commitment on it. It is the only rule in the policy which has an “or-or-or”.

So I think there is a lot of debate and probably it is the factor because all the airline operators are probably so divided on what needs to be done with this rule and there are probably very divergent views on what should happen with that rule.

I thought the draft policy was definitely in the right direction, it is moving in the right way.

However, with that being said, it’s a little bit disappointing for me not to see something more of a strong commitment on 5/20. But we still have three weeks left for this draft to get finalised. It’s a chance for the public to give their views on — do they want more options to fly abroad or be limited with what we have.

How much difference do you think the new policy is going to make in terms of lessening the burden on airlines as far as ground handling goes?

I look at it as a very positive step. Ground handling is a critical function of any airline. Anytime you have an opportunity to run that, make sure you are managing all of the equipment, and the maintenance as well as the people force. I think it’s always a positive for us. It gives us another option on balancing our costs, making sure that we have an avenue to run the operations we really want.

As low-cost carriers, we are constantly looking at dropping costs but making sure revenues are stable and our quality is as high as — if not better than — the full service carriers. When you have an opportunity for ground handling and security to be done by airline operators, I think it’s a great move.

There was also an announcement that once the open skies policy is in place, the government will be opening FDI beyond 49 per cent. Do you think this is going to change the dynamics to India?

Speaking very candidly, I have always heard of other foreign airlines which do want to come to India. We have to understand that India has a growing population.

Right now we are flying about 115 million. The opportunity for us to do significantly more is obviously there. So there is a lot more scope for foreign airline to come here. There is interest. I don’t see this having a significant impact on the point in certain airlines where control is an issue or governance and transparency is an issue.

May be they have just not found the right partner who may now come and say this provides much better opportunity.

I think the bigger issue would have been 5/20. Any foreign airline wanting to come in would have wanted to have some clarity on making sure that they can connect out to whatever other networks they have. So I think that would have had a lot more impact on the interest of any other foreign airline wanting to come in.

Do you think it’s a missed opportunity somewhere, especially to do with 5/20, where the government could have been more aggressive?

I am going to be biased here and say yes. They could have been a lot more aggressive. From day one AirAsia has wanted to revolutionise the way you fly. I think the steps are significant, allowing us to do that.

We have not talked about MRO. That’s a significant impact and I think that’s a wonderful that they are doing in it, fitting very well with Make in India. So I think the policy does hit a lot of right notes.

Low-cost airports coming in is another point.

With 5/20 I definitely think that they missed an opportunity, they could have been a lot more aggressive. Make sure that rules such as that are removed and abolished in their entirety, which is one of the options they have listed.

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