Tata Sons calls for abolition of 5/20

Tata Sons calls for abolition of 5/20

Tata Sons, which has a majority stake in Vistara and minority stake in AirAsia India, once again batted for abolition of the controversial rule 5/20, saying the regulation has benefited only foreign airlines, who have captured 70 per cent of the international traffic with India. 

The statement from Tata Sons came as a war of words erupted between Ratan Tata and rival airlines. As per the 5/20 norm, domestic carriers can fly international services only after five years of flying experience and having at least a fleet of 20 planes. “Tata Sons believes that the 5/20 rule must be abolished if Indian aviation is to achieve its full potential and improve India’s connectivity with the world,” it stated. 

“Apart from the fact that there are no global parallels to this rule, the same is discriminatory to Indian airlines as foreign airlines that do not meet these criteria are allowed to operate in Indian skies, but Indian airlines cannot enjoy reciprocal rights,” it said. Indian carriers are best placed to promote India as a tourism destination and should be encouraged to provide international connectivity if they wish to do so, it said.

The statement argued that “the 5/20 rule has thus far principally benefited only foreign airlines”, who have captured 70 per cent of the international traffic with India, taking Indian jobs and revenue with them. 

“This has also resulted in poor utilisation of bilateral air traffic rights by Indian operators. The removal of the 5/20 rule is estimated to boost international traffic to and from India to over 100 million passengers by FY2021, compared with 43 million in FY2014. This would stimulate the domestic market, and the resultant growth would help all domestic carriers,” it said. “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,” it added.

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