Ghost of 5/20 may haunt GoAir
Wadia group-promoted airline sought relaxation even before Air Asia India
AMID a CBI probe into allegations of Air Asia India lobbying with the aviation ministry for easing overseas flying norms, it has now emerged that it was Wadia group-promoted GoAir that first sought relaxation in the eligibility criteria.
A top industry source told FC that GoAir wrote to the ministry in March 2012, seeking relaxation in 5/20 rule that required a local airline to operate flights in domestic skies for minimum five years before seeking permission for foreign operations.
The source also maintained that industry demands for changes in rules and incentives cannot be categorised as lobbying. The work on abolishing the 5/20 rule in fact started “clandestinely” in the last few months of the UPA-II regime and even some of the officers concerned were not kept in the loop, the source added.
To be sure, the rule could not be relaxed then as dates for the 2014 General Elections had been announced and the model code of conduct was in place barring the government from taking major decisions. It was finally relaxed by the Modi government, which made it a part of the National Aviation Policy, 2016, touted as the first such document in the history of Indian aviation.
“Apart from Air Asia, there was another airline which exerted more influence for changes in the controversial rules,” the source said.
Air Asia India has vehemently denied lobbying and bribe allegations. Company director Shuva Mandal last month had refuted any wrong-doing on its part in securing flying licence or changing guidelines for international flying.
“IndiGo, GoAir and others were in favour of relaxing the 5/20 rule but they started opposing it the moment foreign airlines like Vistara and Air Asia India came in to picture. Through Federation of Indian Airlines (FIA), they wrote to the ministry against the proposed move to change the rule,” the official quoted above said.
The 5/20 rule required a domestic airline to operate flights in domestic skies for five years and have a minimum fleet size of 20 aircraft before seeking permission for foreign operations. Air Asia India was started as a three-way joint venture by Tata Sons (30 per cent), Malaysian carrier Air Asia (49 per cent) and Telestra Tradeplace (21 per cent) in June 2014. In August 2015 the Tatas increased their stake to 41 per cent in the airline by acquiring stakes of Telestra.
Subsequently, Tata Sons further raised the stake in the loss-making JV to 49 per cent buying 7.94 per cent holding of Arun Bhatia's Telestra Tradeplace. Two of its senior executives S Ramadorai and R Venkataramanan took the remaining 2 per cent stake of Telestra in their individual capacities effectively taking the business conglomerate's stake to 51 per cent. Vistara is also a Tata group joint venture with Singapore Airlines holding 49 per cent in the company.
The CBI has registered a case against Air Asia Group CEO Tony Fernandes and others over alleged lobbying for changing aviation rules. It has also named Tata Trusts nominee on the board of the airline R Venkataramanan in the case and is investigating his role in the affairs.