Ratan Tata attacks airlines support of 5/20 rule

Dino D'Amore
By Dino D'Amore February 22, 2016 17:33

Ratan Tata attacks airlines support of 5/20 rule

Ratan Tata, chairman of Tata Group, which owns AirAsia India and Vistara through joint ventures, has hit out  at incumbent airlines in India who are against the abolition of the 5/20 rules that restricts new airlines from flying overseas. Tata accused his rivals of lobbying and using “monopolistic pressures” to retain the rule. However, Ajay Singh, chief executive of SpiceJet has responded by accusing Tata’s airlines of being controlled by their foreign parents and has advised him to ensure his airlines first serve India and then seek to fly international.

AirAsia India and Vistara are currently preventing from flying international routes due to the 5/20 rule since they need a minimum of five years operational experience and at least 20 aircraft. AirAsia India is less than two years old with six aircraft, while Vistara was started in January 2015 and has nine aircraft.

Tata said via Twitter: “The lobbying for discriminating policies between old and new airlines is reminiscent of protectionist and monopolistic pressures by vested interests’ entities who seem to fear competition, as in a variety of other sectors over the years”…. “These protectionist moves have held back progress in India compared to open economies that have thrived on competition overseas,” he said 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…

Singh’s response was: “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.”

Dino D'Amore
By Dino D'Amore February 22, 2016 17:33