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The rule that requires Indian airlines to complete five years of domestic operations and have a fleet of 20 aircraft before starting services abroad has prevented the carriers from claiming their rightful share in international passenger traffic, according to an industry body.
A white paper released by the Associated Chambers of Commerce and Industry of India (Assocham) on the civil aviation industry says there’s no logic in this provision, which is popularly known as the 5/20 policy.
The policy was introduced by the Manmohan Singh Government in December 2004. Prime Minister Narendra Modi’s Government has indicated that it wants to review the policy.
The Civil Aviation Secretary is examining the issue before sending recommendations to the Union Cabinet. While there is unanimity in the Ministry that the rule must be changed, there is no clarity on whether it should be scrapped totally or some provisions be watered down.
On the issue of regional connectivity, the white paper suggests that it is better to provide subsidies to airlines to operate to recently upgraded airports such as Mysore and Puducherry rather than spending hundreds of millions of dollars on developing low-cost regional airports without a business case.
The new Government plans to start work on at least five low-cost airports next year to enhance regional connectivity.
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