Civil aviation industry to say goodbye to the 5/20 formula

The present ruling by the civil aviation ministry has a five-year, 20-aircraft condition for airlines to fly overseas. While in the coming future, this condition can see the end of the day, airlines like Vistara, AirAsia India and others might still not be allowed to freely decide where they can deploy their capacity.

Discussions are going on regarding new laws that would require airlines to operate a certain percentage of their flights in the domestic sector to be able to take international routes, a senior civil aviation ministry official told ET.

This is being done to make sure that the domestic air connectivity is not compromised even as people get more options to fly international.

The present 5/20 policy requires airlines to fly five years on local routes and have a fleet of at least 20 aircraft, which qualifies them to operate international services. The newer airlines, mainly Vistara and AirAsia India, have been demanding the removal of this condition so that they are allowed to fly on lucrative international routes.

However, older airlines like IndiGo, Jet Airways and SpiceJet, which had to meet the conditions under the 5/20 rule before they were allowed to fly overseas, are saying that removing the rule now would be unfair to them, giving undue advantage to new entrants.

The government, on the other hand, wants this condition to be removed so that local aviation industry becomes more attractive for investment as well as be able to offer wider choices for travellers to fly overseas.

Experts are of the view that the government shouldn't bring any new impediments and let the airlines decide on their capacity break-up. They also say that any airline would like to maintain a healthy balance between domestic and international flights, depending on the market requirement.

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