Ratan Tata says old airlines 'lobbying for protection'; SpiceJet chief hits back
NEW DELHI: Tata Group chairman emeritus Ratan Tata has lashed out at old Indian carriers' bid to ensure that the 5/20 rule — which makes it mandatory for desi airlines to be five year old and have a fleet of at least 20 planes to go overseas — is not done away with.
"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 which 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 Modi's leadership," said Ratan Tata in an open letter titled "5/20 rule and vested interests" which he tweeted on Sunday.
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The Tata Group has in last two years launched as many airlines in joint venture with Singapore Airlines (SIA) and AirAsia which want to start flying abroad without waiting for five years like IndiGo and SpiceJet. These two airlines — Vistara and AirAsia India, along with aviation minister Ashok Gajapathi Raju, want 5/20 to be scrapped in the NDA's hugely-delayed aviation policy.
But four Indian airlines — Jet Airways, IndiGo, SpiceJet and GoAir — have come together under the banner of Federation of Indian Airlines (FIA) to oppose that move and are lobbying hard for that. Tata's letter has triggered a war of words with SpiceJet promoter Ajay Singh.
"All of us were asked to serve our great country before we got profitable 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? Mr Tata, whom we respect greatly, should in fact urge these airlines in which his group is a shareholder, to serve India willingly before being allowed to fly international," Ajay Singh said. This fight is unlikely to end in a hurry.
"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, as in a variety of other sectors over the years," Tata said in a no holds barred attack on the FIA, without naming them.
"The minister of civil aviation and the ministry needs to be applauded for considering the removal of the controversial 5/20 rule. One hopes when the new policy is introduced, it will be free of discrimination and protectionism so that Indian aviation can grow for the benefit of consumer and the common man — and not to serve the interests of select beneficiaries of protectionism," Tata added.
"While obtaining a licence, these two airlines had undertaken to follow the 5/20 rule, a rule they are now opposing so vehemently. It is also 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. Mr Tata should urge these airlines to follow Indian law in letter and spirit. No country in the world, including Singapore and Malaysia, allows its airlines to be controlled by foreign airlines. If Indian airlines like SpiceJet and Indigo are not allowed in these countries, why should they be allowed to control airlines in India?" Ajay Singh said.
Minister Raju has for several months been saying that 5/20 must go. However, the government has not been able to decide on that so far. Raju had in December 2014 said that the new aviation policy, that is expected to take a final call on the fate of 5/20 and state the new r
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