Bengaluru–A spat broke out in India’s civil aviation sector on Sunday with the Tatas-funded twin carriers and older airlines arguing over whether the 5/20 rule should be retained or relaxed in the new aviation policy.

Hours after Tata Sons chairman emeritus Ratan Tata, in a tweet, favoured waiver of the 5/20 rule, which mandates five years experience and 20 aircraft fleet to qualify to fly abroad, budget carrier SpiceJet chairman Ajay Singh joined issue, seeking it be retained.

Ratan Tata
Ratan Tata

“It is sad to see incumbent (old) airlines lobbying for protection and preferential treatment for themselves against the new airlines, which have been formed in full compliance with prevailing government policy and providing air transport to Indian citizens in line with the dream of ‘New India’,” tweeted Tata.

In rebuttal, Ajay Singh said: “All of us were asked to serve our great country before we got profitable rights to fly abroad. We served with great pride. What is wrong if these two foreign-controlled airlines are also asked to serve India before being allowed to fly international?”

Tata Sons-funded full-fledged airline Vistara with nine planes and budget carrier AirAsia India with six aircraft are opposed to the 5/20 rule, as they both are less than two years old and hence not eligible to operate international flights.

Vistara is a joint venture with Singapore Airlines, while AirAsia India is a tri venture with Air Asia Berhard of Malaysia and Arun Bhatia’s Telstra.

Noting that lobbying for discriminating policies between old and new airlines was reminiscent of the protectionist and monopolistic pressures by vested interest entities which seem to fear competition, Tata lamented that such moves held back progress in India compared to open economies that thrived on competition abroad.

“The call for a new open market economy in India will promote growth in an open market based on competitiveness and not from self interest-based protectionism,” Tata said in his message posted on his Twitter account.

His observations came at a time when the Narendra Modi government is seized of the contentious issue on the civil aviation ministry’s draft policy and response it got from stakeholders in the sunrise sector.

“Tata, whom we respect greatly, should in fact urge these airlines in which his group is a shareholder, to serve India willingly before being allowed to fly international,” Singh observed, claiming that Vistara and AirAsia India undertook to follow the 5/20 rule before obtaining a licence though they were opposing it now.

Applauding Civil Aviation Minister Ashok Gajapathi Raju and his ministry for considering the removal of the controversial 5/20 rule, Tata said he hoped the new policy would be free of discrimination and protectionism so that Indian aviation could grow for the benefit of consumer and common man and not to even the interests of select beneficiaries.

Tata’s tweet follows a representation by the Federation of Indian Airlines (FIA) comprising Jet Airways, SpiceJet, IndiGo and GoAir to Minister of State in the PMO Jitendra Singh on retaining the 5/20 norm, auctioning of additional seats to foreign carriers among other issues.

Stating that Vistara and AirAsia India were controlled by their foreign parents, Singh said their holdings in both the joint ventures of Tatas were in violation of the Indian laws that require airlines to be effectively controlled by Indian shareholders.

“Tata should urge both the airlines to follow Indian laws in letter and spirit,” Singh said, adding no country the world over, including Singapore and Malaysia, allows its airlines to be controlled by foreign airlines.

“If Indian airlines like SpiceJet and Indigo are not allowed in these countries, why should they be allowed to control airlines in India?” he asked.

The spat came to the fore three days after Home Minister Rajnath Singh on February 18 chaired a high-profile meeting to discuss the proposed aviation policy, amid hectic lobbying by domestic carriers for a level-playing field vis a vis foreign players, and demands for continuing the norms to fly overseas.

Among the seven main scheduled airlines in the country, only four meet the requirements — Air India, Jet Airways, SpiceJet and IndiGo. The three others — GoAir, Vistara and AirAsia India — are not eligible under the present norms.

At the same time, several aviation research institutions such as the Centre for Asia Pacific Aviation, have described the rule as being damaging, discriminatory and anti-competition, besides preventing carriers from optimal fleet utilisation and expansion.