Pvt carriers, Tata Sons clash over overseas flying norms

The war of words between a grouping of four private Indian carriers and two new Tata Sons-invested airlines over a norm for starting international operations escalated today with the latter being accused of not acting in national interest by opposing the rule.

The Tata Group called for abolishing the controversial 5/20 norm for local carriers, saying it has only "benefited foreign airlines" and its removal would help "improve" India's air connectivity with the world.

The norm bars airlines from starting overseas operations till they have a fleet of 20 aircraft and five years of domestic flying experience which will effectively keep out Tata's startup airlines Vistara and AirAsia India. The four private carriers want the norm to continue.

The Federation of Indian Airlines (FIA), which comprises IndiGo, SpiceJet, Jet Airways and GoAir, criticised the alleged lobbying by the two new carriers for removal of 5/20 norm, saying it was in the "self-interest" and not in "national interest" of the two carriers.

"FIA is deeply disturbed by the statements issued by Tata claiming to be in national interest but effectively in self-interest," FIA said in a statement.

"They (Vistara and AirAsia) 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," it said.

Scrapping of 5/20 rule is one of the proposals made by the Ministry in the draft civil aviation policy, which is in the advanced stage of finalisation. Significantly, the proposal to do away with the 5/20 norm was mooted around the time Tata Group announced its re-entry in the domestic airlines industry in 2013.

Tata Sons, the major holding companies of diversified Tata Group--which holds stakes in Vistara and AirAsia India--said claims that airfares would go up if 5/20 norm is removed is "specious and unfounded".

"The claim that air fares in India will go up as a result of removing the 5/20 rule is specious and unfounded. Not protectionism, but increased competition within the country will further contribute to lower prices and greater accessibility of air travel to common people," Tata Sons said in a statement.

Coming out strongly against Ratan Tata's pitch to scrap the norm, the Federation said the removal of the rule would lead to higher airfares and result in "reverse discrimination".

The statement bt Tata Sons comes days after Tata Group Chairman Emeritus Ratan Tata accused older carriers of lobbying and using "monopolistic pressures" to retain preferential treatment under the 5/20 rule.