Tata accuses older airlines of ‘monopoly’
FLIGHT STATUS Says lobbying against removal of overseas flying rules signals protectionist pressures; SpiceJet hits back
NEW DELHI: Tata Group chairman emeritus Ratan Tata has slammed older Indian airlines for lobbying against the removal of the 5/20 aviation rule that restricts overseas flying by new airlines.
The rule bars airlines from starting international operations till they have a fleet of 20 aircraft and five years of domestic flying experience.
While Tata did not name any airline, his note “5/20 and Vested Interests”, which he tweeted on Sunday, comes at a time when the government is set to take a final call on whether the contentious rule should stay or not.
Tata’s tweet drew a sharp response from SpiceJet CMD Ajay Singh, who questioned what was wrong if the “two foreign-controlled airlines” were asked to serve India before being allowed to fly international, referring to Tata Group-backed startups Vistara and AirAsia India.
The Federation of Indian Airlines (FIA), which comprises IndiGo, SpiceJet, Jet Airways and GoAir, want the rule to stay, while Vistara and AirAsia India want it to be abolished. While Singapore Airlines is the other stakeholder in Vistara, budget carrier AirAsia and Arun Bhatia of Telestra Tradeplace Pvt Ltd partner the Tatas in AirAsia India. Air India recently withdrew its opposition to the abolition of the rule.
“It is sad to see the incumbent airlines lobbying for protection and preferential treatment for themselves against the new airlines, which have been formed in full compliance with prevailing policy,” Tata said. “The lobbying for discriminating policies between old and new airlines is reminiscent of the protectionist and monopolistic pressures by vested interests’ entities who seem to fear competition.”
“The ministry of civil aviation needs to be applauded for considering the removal of the controversial 5/20 rule,” he said.
Countering Tata, Singh said, “All of us were asked to serve our country before we got rights to fly abroad. What is wrong if these two foreign-controlled airlines are also asked to serve India before being allowed to fly international?
“It is evident that these airlines are controlled by their foreign parents. This is in complete violation of Indian laws that require airlines in India to be effectively controlled by Indian shareholders. No country in the world, including Singapore and Malaysia, allows its airlines to be controlled by foreign airlines,” Singh said.