India to revise foreign policy for airlines

AirAsia India opposes the 5/20 rule
AirAsia India opposes the 5/20 rule

The Indian government is planning to revise its controversial ‘5/20’ policy for international aviation, following complaints from start-up airlines.

The ruling requires airlines to operate domestic routes for five years and built a fleet of 20 aircraft before they are eligible to launch international flights.

New airlines including AirAsia India and Vistara have called for the ruling to be scrapped, but they face opposition from existing airlines, such as Jet Airways, IndiGo and SpiceJet, which have already complied with the policy.

To avoid taking sides in the dispute, India’s Civil Aviation Ministry has asked the government to create a replacement for the 5/20 rule. While the new policy is yet to be decided, it is likely to be a watered down version of the existing rule, in an effort to satisfy all parties.

The Economic Times quoted a ministry official, who requested to remain anonymous, as saying that two options are being discussed.

“One will be to reduce it to… two years and 10 aircraft, and the other would be to replace it by the domestic flying credits model,” the official said.

The domestic credits model would allow airlines to earn credits for the number and distance of domestic fights they operate. Once enough credits have been accumulated, the airline will be eligible to operate international flights.

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