Is the Government looking to protect interests of existing carriers?

The Ministry of Civil Aviation’s latest proposal of not allowing new start-up airlines to operate flights to the Far and Middle East is a way of protecting existing airlines Air India, SpiceJet, IndiGo and Jet Airways.

The existing domestic industry raised a collective voice of dissent when the Modi Government started the process of dismantling the 5/20 guidelines (five years of domestic flying and 20 aircraft) which SpiceJet, Jet and IndiGo had to follow before they started international operations.

What is being proposed now is a kind of mid-way point — 5/20 goes but new start-ups are not allowed to fly to international destinations which are 5½ to six hours from India. In effect, this rules out AirAsia India or Vistara from flying, say, a Delhi-Kathmandu, Chennai-Colombo, Bangalore-Male, Delhi-Dubai or Delhi-Singapore route.

However, the new proposal could still leave a window of hope for Vistara and AirAsia India which have strong international airlines as partners as there seem to be no restrictions on these airlines flying to international destinations that are more than six hours away. AirAsia India is in partnership with AirAsia Behard, the Malaysia headquartered low cost airline promoted by Tony Fernandes.

Fernandes has ordered several Airbus A-330 aircraft, which he uses to launch long haul flights between Kuala Lumpur and destinations in Europe. Similarly, Vistara is a joint venture between Tata Sons and Singapore Airlines. Singapore Airlines operates one of the youngest fleets in the world with an average fleet age of seven year. The airline orders aircraft regularly from both Airbus and Boeing. This could potentially be used to Vistara’s advantage.

Senior Vistara officials have been quoted in the media, saying that the India London route which is about 9 hours of flying time from India could well help circumvent the six-hour band.

There are parallels for this. During Prime Minister Atal Bihari Vajpayee’s regime, India firmed up an open sky agreement with South Asian countries including Sri Lanka.

SriLankan, Sri Lanka’s national airline was then managed by Dubai based Emirates. Within months of the agreement, SriLankan was able to procure more aircraft, thanks largely to Emirates’ help and it became the largest foreign operator out of India with over 100 weekly services.

But never underestimate the Indian Government. There are many inbuilt provisions in the new guidelines to make flying abroad difficult for start-ups — an annual safety audit by the Directorate General of Civil Aviation and achieving a minimum domestic flying credits gathered by flying more within India.

Ministry officials estimate that a start-up could take a minimum of 2.5 years before IT becomes eligible for applying to the Government for permission to start international services.

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