Hyderabad: The contentious 5/20 rule that restricts Indian airlines from flying abroad till it fulfills certain criteria is likely to be scrapped as the government has proposed direct incentives to airlines promoting regional connectivity in its new aviation policy.
New airlines like Vistara and AirAsia have been pushing for scrapping it, while older airlines like Jet, IndiGo, SpiceJet, etc are defending it. According to the 5/20 rule, an Indian airline cannot fly abroad unless it has operated in India for five years, or it has an operational fleet of 20 aircraft.
Though civil aviation minister Ashok Gajapathi Raju refused to reveal the government's stand on the rule, sources claim that the government has decided to scrap the policy as it has not served the purpose of forcing new airlines to increase regional connectivity by restricting their operations to India for the first five years.
With the government almost decided on providing viability gap fund and other tax benefits to airlines for improving regional connectivity by lowering ticket prices, sources feel there is no need to continue with the 5/20 policy.
When asked about his stand on the 5/20 rule, the minister shot back at media persons asking: “What is scientific about rule 5/20.” The minister also said that it is not benefiting Indian airlines. "The 5/20 rule is a peculiar thing to India. It disallows Indian airlines from flying abroad until they operate in India for five years or they have a fleet of 20 aircraft. However, the net result is that in our aviation agreements with other countries, our side (airlines) did not perform as expected."
Civil aviation secretary RK Choubey said the government has come to a reasonable understanding about the issue and will announce it after the approval of the Union Cabinet. The new aviation policy will be announced in April after the Cabinet’s approval. Mr Choubey said the viability gap funding will not have budgetary implications as the ministry will fund it by imposing a two per cent levy on air tickets for flights between well-connected destinations.
