The aviation sector is in for an overhaul and consumers are set to become the biggest beneficiaries of the civil aviation policy announced by the government on Wednesday.
The Cabinet has cleared the new civil aviation policy which will cap fares for passengers and introduce a new rule for airlines looking to expand operations abroad.
Vistara Airlines, a joint venture between the Singapore Airlines and the Tata Group and AirAsia India are the top beneficiaries of the new 0/20 rule announced in the policy.
The two airlines have been demanding scrapping the 5/20 rule which was introduced in December 2004 by the UPA government to protect the interests of air carriers, along with the national airline Air India.
The 5/20 rule mandates local airlines having at least five years of operational experience and a fleet of minimum 20 aircraft are allowed to fly overseas.
This puts new carriers in an unfavourable position compared with older players in the sector, AirAsia India and Vistara have argued in the past.
While Vistara was set up in January 2015, AirAsia started its operations in June 2014.
While Vistara has 9 planes in its fleet, AirAsia has six aircraft.
Going by the 5/20 rule, the two airlines would have become eligible to fly overseas in 2020 and 2018, respectively, provided they had 20 aircraft in their fleet operating on domestic routes for five years.
16/06/16 Aseem Thapliyal/Business Today
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The Cabinet has cleared the new civil aviation policy which will cap fares for passengers and introduce a new rule for airlines looking to expand operations abroad.
Vistara Airlines, a joint venture between the Singapore Airlines and the Tata Group and AirAsia India are the top beneficiaries of the new 0/20 rule announced in the policy.
The two airlines have been demanding scrapping the 5/20 rule which was introduced in December 2004 by the UPA government to protect the interests of air carriers, along with the national airline Air India.
The 5/20 rule mandates local airlines having at least five years of operational experience and a fleet of minimum 20 aircraft are allowed to fly overseas.
This puts new carriers in an unfavourable position compared with older players in the sector, AirAsia India and Vistara have argued in the past.
While Vistara was set up in January 2015, AirAsia started its operations in June 2014.
While Vistara has 9 planes in its fleet, AirAsia has six aircraft.
Going by the 5/20 rule, the two airlines would have become eligible to fly overseas in 2020 and 2018, respectively, provided they had 20 aircraft in their fleet operating on domestic routes for five years.
16/06/16 Aseem Thapliyal/Business Today
