Ratan Tata slams 5/20 rule, SpiceJet's Ajay Singh hits back
22 February 2016
A war of words has broken out between industry doyen Ratan Tata, chairman of Tata Trusts, and India's older airlines after Tata on Sunday accused them of lobbying the government and using ''monopolistic pressures'' to retain preferential treatment under the controversial 5/20 rule that restricts overseas flying by new airlines.
Under the current regulations, only airlines that have been operating for at least five years with a minimum of 20 aircraft are allowed to operate on international routes.
Reacting strongly to Tata's charge, low-cost carrier SpiceJet's chief Ajay Singh asked him to advise the two airlines associated with the Tatas - Vistara and AirAsia India - to first serve India and then seek to go international.
Singh also alleged that the two carriers were controlled by their foreign parents and said they had undertaken, while applying for the licence, to follow the 5/20 rule which they are opposing so vehemently now.
AirAsia India and Vistara - two airlines operated by the Tatas through joint ventures - are presently ineligible to operate overseas under the 5/20 norm.
The government is currently in the advanced stage of finalising its new civil aviation policy, wherein one of the proposals is to scrap the 5/20 rule.
While several older airlines including SpiceJet, Jet Airways, IndiGo and GoAir are opposing any move to scrap the norm, Tata applauded the civil aviation ministry's proposal to remove the ''controversial'' rule.
Terming as sad the lobbying of incumbent airlines for ''protection and preferential treatment'', he tweeted, ''The lobbying for discriminating policies between old and new airlines is reminiscent of protectionist and monopolistic pressures by vested interests' entities that seem to fear competition, as in a variety of other sectors over the years,'' Tata said in a strong message on Twitter.
''These protectionist moves have held back progress in India compared to open economies that have thrived on competition overseas,'' Tata Group's chairman emeritus said in his message titled '5/20 Rule and Vested Interests'.
''In the airline industry in India, it is sad to see the incumbent airlines lobbying for protection and preferential treatment for themselves against the new airlines...
''(The new airlines) have been formed in full compliance with prevailing government policy and providing air transport to Indian citizens in line with the dream of a 'New India' promoted by the new government under (Prime Minister Narendra) Modi's leadership,'' said Tata, who was instrumental in the group's re-entry into the aviation sector after a long hiatus.
Tata Group and Singapore Airlines together run Vistara, while AirAsia is a three-way joint venture between Tatas, Malaysia's AirAsia and Arun Bhatia's Telestra.
AirAsia India is less than two years old with six aircraft, while Vistara was started in January 2015 and has nine planes.