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India replaces 5-20 rule with domestic flying credits proposal for new airlines
Shekhar Niyogi, Kolkata, March 20, 2015

NEW airlines in India cannot mount flights to international destinations within a six-hour flight radius and must earn credit before being allowed to fly longhaul, proposes a new rule put forth by the government that looks like a backpedal from promises of a more transparent and business-friendly environment.  


Under the proposed system, airlines would need to accumulate 300 domestic flying credits (DFCs) to ply international longhaul routes – a feat considering that carriers will need to have been in business for at least a year and own a fleet of six Boeing 737 or Airbus 320 category aircraft to reach 200 DFCs.


DFCs are earned for each domestic flight operated. 


TTG Asia e-Daily is unable to independently verify the criterion for flying to international destinations within the six-hour radius.


Nevertheless, this effectively dents the aspirations of new carriers like Vistara and AirAsia India by forbidding flights to commercially profitable destinations like Singapore, Bangkok, Dubai and Abu Dhabi, in favour of protecting existing legacy airlines.


The proposal will be deliberated by the cabinet and implemented in April, and is meant to replace the unpopular 5-20 rule which stipulates that new airlines must have operated domestically for at least five years and own a fleet of 20 aircraft before it can start international flights.


News analysts have speculated that the proposed rule is partially aimed at pacifying existing Indian carriers that had objected to India revoking 5-20 for the new start-ups like Vistara.


Rajendra Churiwala, director-eastern region, IATA Agents Association of India, said: “(The new system) is a way to protect the national carrier from competition. When most flying rights between India and the Middle East have been used up and routes monopolised by the three leading carriers from the UAE and Qatar, new carriers should get a shot at these shorthaul routes. Conversely, Air India, until now, has not used their limit of flying rights to the Middle East.”


He added: “In contrast, a new airline like Air Arabia was allowed to fly into multiple Indian destinations without any restriction.”

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