Logistics

SpiceJet has ‘principled objections’ to govt easing 5/20 rule, says Ajay Singh

Ashwini Phadnis New Delhi | Updated on January 19, 2018 Published on February 16, 2016

Ajay Singh, Founder, SpiceJet

SpiceJet has “principled objections” to the government’s move to ease the 5/20 norm even though the airline will not be affected if the rule is removed, Ajay Singh, the airline’s promoter has said.

Pointing out that the rule has resulted in “massive connectivity” within the country, Singh said, “Our belief is that if we were asked to serve the country before we got lucrative rights to go abroad it is unfair that the new carriers should also not have to serve the country before flying overseas.”

“It seems that the Ministry is trying to relax the rules for these two airlines…. AirAsia and Vistara both of whom are in flagrant violation of Indian law today. There is no country in the world today which allows its airlines to be controlled by a foreign airline. US does not do it, Canada does not do it, Europe, the Gulf states, Malaysia and Singapore also does not. It is not allowed,” Singh told BusinessLine in an interview on the eve of the first anniversary of him joining SpiceJet’s board. “India is part of the International Civil Aviation Organisation and other conventions (which say) that airlines in India must be owned and controlled by India. Here we have a situation where these two airlines are controlled by their foreign parents,” Singh added.

Violation of laws

Giving another instance of violation of Indian laws, Singh said that when the new airlines applied for the Air Operator Permit (AOP) here in India they gave an undertaking that they will accept Indian laws including 5/20.

“As soon as they got the AOPs, they said remove 5/20,” he added.

Maintaining that the two airlines were controlled by their foreign parents (Singapore Airlines for Vistara and AirAsia Berhard for AirAsia India), Singh said, “No country in the world will have the shareholders complain that the airline is completely managed by the foreign parent. And do nothing about it. The fact is that the senior CEO and senior management are appointed by the parent.

“The revenue, finance, audit everything is controlled by the parent to the extent that even meetings and board meetings happen in the domicile of the foreign parent. Press releases are issued there. All statements are made on behalf of the foreign parent. If that is not control than I do not know what is.”

Arun Bhatia of Telestra Tradeplace Pvt is one of three partners in AirAsia India.

In the recent past, Bhatia has raised issues about the company being run by foreigners, something not permitted by Indian law.

AirAsia Investment Ltd (AAIL), the investment arm of AirAsia Berhad, holds 49 per cent equity in AirAsia India, while Tata Sons holds a 30 per cent stake in the project and Bhatia has the remaining stake.

Published on February 16, 2016
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