5/20 rule: Tata Sons, airlines body war of words escalates

A full-blown war of words has broken out between the Federation of Indian Airlines (FIA) and Tata Sons, the holding company of the Tata Group, on the issue of whether the Centre should remove the 5/20 rule.

On Wednesday, Tata Sons issued a statement saying: “Keeping the national interest in mind, Tata Sons believes that the 5/20 rule must be abolished if Indian aviation is to achieve its full potential and improve India’s connectivity with the world.”

“Apart from the fact that there are no global parallels to this rule, the rule is discriminatory to Indian airlines as foreign airlines that do not meet these criteria are allowed to operate in Indian skies, but Indian airlines cannot enjoy reciprocal rights. Indian carriers are best placed to promote India as a tourism destination and should be encouraged to provide international connectivity if they wish to do so,” the statement added.

The Federation of Indian Airlines, which comprises IndiGo, SpiceJet, Jet Airways and GoAir, criticised the alleged lobbying by Tata Sons for removal of the 5/20 norm, saying it was in the “self-interest” and not in “national interest”.

FIA, in a statement, said, “Tata, Vistara, Air Asia were fully aware of the policy and its objectives. They claim to be ‘Indian’ airlines and so it is puzzling that they now do not wish to serve the Indian civil aviation growth story and be a part of India’s future growth. They only wish to, it appears, serve their self-interest and establish themselves in India in order to fly international.” FIA has been voicing its opposition to the Centre’s move to remove the 5/20 rule. The rule lays down that an Indian carrier must complete five years of domestic operations and have a fleet of 20 aircraft to start flying abroad. AirAsia and Vistara are keen that the government do away with 5/20.

FIA members maintain that if the 5/20 rule goes, then the route dispersal guidelines which stipulate how much domestic flying an Indian carrier has to do, must also go. FIA is also of the view that air fares will go up if the 5/20 rule goes.

In response, the Tata Sons statement called this argument “specious and unfounded”. Instead, the Tata Sons statement said that with forward–looking policies and steps to reduce the costs of doing business, the airline industry in India is likely to see greater activity and more competition in the years ahead. The exchanges between the two sides come even as the government maintains that no final decision has been taken on the civil aviation policy.

A senior Civil Aviation Ministry official said: “There is likely to be another round of consultations between the various key Ministers. After which the final note on the civil aviation policy will be sent for inter-ministerial consultations. Fifteen days after that, the final issue will be taken up by the Cabinet.”

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