THE 5/20 RULE - SHOW IT THE DOOR!
By Ruma Dubey
Air India. What does the mere mention of this name bring to mind?
Yes, the Maharaja who is no longer there and then all things negative – always late, rude staff, questionable flight safety, fiefdom of politicians, an overall sense of apathy and the last vestige of an era gone by. The only redeeming factor of Air India – the food served is usually good! But is that reason enough for the Govt to go on feeding this white elephant which none can afford?
The call for privatization of Air India had been given long time ago. That is never going to happen. Divestment is probably the best route to raise money to feed this black abyss but even that might never happen, given the opposition of the trade unions. And the Govt continues to do all it can to constantly support this lost cause, putting our hard-earned tax money to make a one-legged airline run a marathon.
The current brouhaha over the 5/20 rule for the Indian aviation has rekindled all these pent up emotions for Air India. In fact the rule itself was made to protect Air India – that was the sole purpose of the rule. While on the other hand, there are others who say that rule was promulgated by ex-aviation minister of UPA raaj, Mr.Praful Patel. It is said that he brought in this 5/20 rule to protect Jet Airways and Kingfisher.
Whatever be the reason, what does this 5/20 mean? 5 in 5/20 stands for 5 years and 20 stands for at least 20 planes in the fleet. That is the condition set for domestic airlines to fly international – the company which wants to fly into and out of India, needs to have been in existence for at least 5 years and with a minimum fleet of 20 airplanes.
The thorn in the bush here – this 5/20 rule does not apply to foreign airlines. Anyone and everyone, with even no experience, as long as the company is phoren, can fly into and out of India. This bizarre rule this explains why less than one-year old Etihad Airways of Abu Dhabi was allowed to provide services to India while older, registered ones like Vistara and AirAsia India are not able to do so. Dubai-based Emirates now carries more outbound passengers from India than any Indian airline. How pro-industry is this rule?
It is easy to understand why Air India is not in favour of opposing this rule as it means lesser competition. At the same time, the Federation of Indian Airlines (FIA) — a platform of IndiGo, Jet, SpiceJet and GoAir have also jointly opposed scrapping of this 5/20 rule for obvious reasons. They say that giving a free way to new entrants would remove the level playing field. Their grouse is also that removal will shift all advantage to foreign airlines controlled new entrants.
Cleary, in today’s flat world, such ‘protectionist’ attitude has to go. It is survival of the fittest. By putting in this 5/20 rule, the Indian aviation ministry has choked the life out of the existing airlines. By allowing foreign airlines to fly into India and not allowing ours to fly abroad, it has deprived our own carriers of crucial growth and revenue generation opportunities. Removal of this rule would have also meant that financially strapped airlines could have refueled at cheaper rates abroad and helped improve the aircraft utilization.
A new draft civil aviation policy has been mooted and the civil aviation minister also supports removal of 5/20. The policy, instead of 5/20, has said that an airline can apply for an international flying permit to destinations which are of more than six hours duration after it accrued 300 domestic flying credits (DFCs). In the same way, a domestic carrier can fly on routes which are less than six hours, only after it has accumulated 600 DFCs. This, many say would be not only tough for new airlines but also for existing airlines to fulfill.
This 5/20 is in the limelight today as PM Modi yesterday, while considering the draft policy, said that it would be better to seek wide ranging public consultations before the cabinet takes a call on the controversial 5/20 rule.
The bottomline here – the Govt has to get out of airline operations. And those seeking extension of protection need to know that – too bad they had to suffer through this rule but that does not mean others should also. As time and thinking evolves, progress will happen and rules will change. Yes, 5/20 should go.