With the problems of Discovery Air Nigeria should copy the Indian 5/ 20 rule for its airlines

image003NEW DELHI, India – The blueprint of the proposed new rules for Indian carriers to start flying abroad has left ‘old’ airlines seething.

The replacement for the controversial 5/20 rule — that an airline must be five-year-old and have 20 planes in its fleet before going overseas — links flying within the country, especially to remote and un-served areas, to allowing airlines going abroad as well as giving new international routes to old players. The ‘old’ airlines are objecting to this ‘clubbing’ as they point out that the successor to 5/20 can benefit ‘new’ players but not ‘hurt’ them as they have already suffered huge losses in meeting the stringent norms to earn overseas rights.

The aviation ministry recently shared its proposed replacement for 5/20 with airlines, which pushes for enhancing connectivity within the country, especially on regional, remote and un-served routes. TOI has accessed this presentation.

At present, there are only 12 — mainly metro — category I routes. Airlines are mandated to deploy at least 10% capacity deployed on these lucrative routes on category II routes that are in the Northeast, Jammu and Kashmir, Andaman and Nicobar and Lakshadweep.

The ministry now proposes to increase the 12 category I routes to 26 by bringing in 14 new routes on which over five lakh people flew in 2013. The proposed additions include Delhi-Lucknow, Mumbai-Cochin and Chennai-Pune. Also, it wants to enlarge the scope of category II routes by including Uttarakhand and Himachal airports of Dehradun, Shimla, Kullu and Dharamshala in this list. While enlarging the scope of category I, the ministry wants 20% of the capacity deployed on it to be put on the revised category II routes.

Airlines would then earn “domestic flying credits (DFC)” by operating on domestic routes. The weightage for flying to category II routes and un-used airports would be three and five times, respectively, higher than the points earned for flying on category I routes.

Airlines are now proposed to be allowed to fly abroad when they accrue “a minimum of 200 crore DFCs” and have a fleet of five aircraft (the minimum required within a year for scheduled airlines). “It will be possible for an airline to qualify for international operation by amassing 200 crore DFCs in one year with five aircraft… We may allow an airline to purchase DFCs from other airlines (say up to 25% to 30%),” the ministry told airlines.

While old airlines are anyway resenting the relaxation of 5/20 rule, one line in the ministry’s presentation added to their heartburn: the proposed “criteria may apply to new airlines and new routes to be allotted to old airline.”


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