AirAsia chief raises questions over 5/20 norm

AirAsia chief raises questions over 5/20 norm

The war of words over 5/20 norm continued with AirAsia chief Tony Fernandes today taking a dig at promoters of Indian airlines asking whether all of them live in India, in an obvious reference to Jet Airways Chairman Naresh Goyal, an NRI living in the UK.

Goyal's airline along with three budget carriers - IndiGo, SpiceJet and GoAir - are opposed to change in the existing regulation, popularly known as '5/20 norm' for international flying by domestic carriers, which the government is mulling as part of its proposed new civil aviation policy.

AirAsia India and Vistara - two airlines operated by the Tatas through joint ventures - are presently ineligible to operate overseas as the 5/20 norm requires an Indian carrier to have minimum five years domestic operational experience and at least 20 planes to go international.

"Reading all the stuff on TATA and Airasia. Quite crazy 5 20 hasn't been solved. Are owners of Indian airlines living in India. Naresh? NRI," Fernandes said in a series of tweets.

Tata Sons runs joint venture airlines, Vistara and AirAsia India, with Singapore Airlines and AirAsia respectively. Arun Bhatia of Telestra Tradeplace is the third partner in AirAsia India.

Terming as sad the lobbying of incumbent airlines for "protection and preferential treatment", Chairman Emeritus of Tata Sons, Ratan Tata had last Sunday said such moves (for continuation of 5/20 norm) are reminiscent of the monopolistic pressures by entities with vested interests who fear competition.

The incumbent carriers under the banner of Federation of Indian Airlines (FIA) too hit back at Tata and the subsequent statement from Tata Sons alleging that the demand to call for removal of 5/20 was not in "national interest" but "self-interest" on the part of the Tata Sons and its partner airlines.

"People of India your voice needs to be heard more. For too long airlines have been controlled by a few. Mostly NRI. Competition is needed," Fernandes, whose airline AirAsia holds 49 per cent in AirAsia India, said in another tweet.

"Indians need more Tourism. More jobs. Only country in the world with a 5 20 rule. Malaysia has foreign airlines operating here. No issue," he further tweeted.

Under the current FDI regulations, foreign airlines can own up to 49 per cent in domestic carriers while an NRI is allowed to hold 100 per cent in an airline.

However, FIA alleges that AirAsia India and Vistara were being controlled by their overseas stakeholders - Air Asia Bhd and Singapore Airlines, respectively, a charge which Tata Sons has denied.

Tata Sons claim that that the majority ownership and effective control of both airlines are with the Indian parties as per the government's requirement.

Responding to allegations of older airlines that Indian carriers can't set up an airline company in Malaysia, Fernandes tweeted, "Can't see why not. There is an Indonesian airline operating a MALAYSIAN aoc (air operator certificate)."

Along with finalising the new civil aviation policy, which is in the advanced stage, the government also has to decide the fate of 5/20 norm.

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