The growth of a business is highly dependent on its surroundings and nature of the market. At times, it can be a fast-paced process while on other instances, it can be a gradual process. The aviation business is a mix of both, and it includes taking quick decisions along with waiting for the right moment to introduce some new ideas. That right moment has arrived for many carriers based in India as the National Civil Aviation Policy 2015 draft supports the elimination of the 5/20 rule from the scenario. This has given hopes to launch the ambitious Air Kerala project soon, thus increasing the number of Delhi to Kochi flights as well as international ones. In addition to this, a number of new options can be added to the network of the recently launched carriers like AirAsia and Vistara.
What is the 5/20 Rule?
As per the 5/20 clause of the civil aviation authority of India, carriers based in the country are not allowed to operate on international routes unless they do not complete five years in this business and own a fleet of at least 20 aircraft. This implies that new carriers have to operate solely in the domestic market and gain beforehand experience to operate hassle-free international flights. The other condition of this clause, which is owning 20 aircraft, makes sure that airlines have enough resources to operate on international routes.
The Significance in the Current Scenario
It can be clearly seen that these rules were made to ensure that airlines carry a smooth business, but the question is if they are significant in the current scenario or not. This clause was added years back when the aviation industry in India just started to expand, and a number of players came forward to try their luck. Back then, this made sense to operate in the domestic market for five years and gain some experience before flying in the international markets for the safety of passengers. However, recently launched carriers like Vistara and AirAsia are a part of the global giants in the industry; hence, have good experience in this field.
Similarly, as the aviation business was new and lucrative, it was risky at the same time. The fleet size of at least 2 aircraft ensured that carriers will not fall short of resources that may lead to its shut down. In addition, it also made sure that there are enough models to meet the rapidly increasing demand for air travel on international routes. However now, business practices have changed, and the new companies come up with strong financial back-up. Hence, it can be said that this clause has lost its significance over the years.
Benefits to Carriers and Travellers
The removal of this clause from the picture will benefit carriers as well as travellers. Carriers like Vistara and AirAsia may launch their international operations as soon as all the formalities to eliminate this criterion are done. As their associates are already operating on the international routes, they may come up with great deals on airfare for an international destination with their help.