In a world where over-regulation of the airline industry is the norm, India still managed to go the extra mile with its 5/20 rule.
Stipulating that carriers have been operating for five years and possess 20 aircraft before launching international services, the regulation unfairly limited the growth potential of new airlines, favouring incumbents.
India’s long-awaited National Civil Aviation Policy attempts to put 5/20 to rest, but cannot let go entirely. Airlines can start international operations when they please – provided they have 20 aircraft, or at least 20% of capacity on domestic routes, whichever is greater.
Elsewhere, the new policy attempts to loosen rather than cut back on red tape. Hence it includes a rough fare cap of INR2,500 ($37) per hour for regional flights, reaffirms that carriers must serve remote areas, and retains the government’s overbearing role in airline operations.
Still, New Delhi looks serious about dealing with some bugbears. Despite the country’s vast low-cost labour pool, 90% of the $750 million that Indian carriers spend on maintenance annually goes overseas. The government is looking to relax regulations with an eye on boosting the local overhaul sector.
Other initiatives are aimed at improving airports, helicopter operations and ground handling. For a country in such dire need of connectivity, the policy, while far from perfect, is a welcome start.
Source: Flight International
