The Indian aviation market witnessed a number of changes in the previous year. The Indian arm of the Malaysia-based AirAsia started operating its Indian arm and Etihad invested a huge fund in Jet Airways. A few months later, Vistara – a joint venture between Tata Sons and Singapore Airlines – also started operations in the Indian skies. In addition to these new ventures, rise in the demand and drop in the cost the Aviation turbine Fuel (ATF) also brought a significant twist in the market scenario. To capitalise on these opportunities, domestic airlines India came up with a number of lucrative offers. Another most important change can be the nullification of the 5/20 rule.
5/20 Rule
This rule states that carriers, which are set in the Indian market, have to operate for at least 5 years in the domestic market and own at least 20 aircraft before commencing international services. Aviation rules were drafted a few decades back, in accord with the erstwhile scenario. For instance, this 5/20 clause was added for the utmost safety of fliers. Earlier, new enterprises took a bold step to enter in the aviation business because of its wide scope and rewarding nature. However, all of them were new in this area and international market is too big as well as risky for amateurs. In order to make sure that everything goes well, these carriers were asked by aviation authorities to operate for five years in the Indian market. Similarly, the 20 aircraft term ensured that they do not fall short of resources in the future. Nowadays, recently launched cheap airlines in India are either a part of renowned global airlines or owned by them.
Present Significance
As mentioned earlier, recently launched domestic airlines in India are operated under companies, which have been handling such operations for years. Hence, the rule is not relevant in the current market situations. The government is also looking forward to nullify its. This will help carrier like Vistara and AirAsia to offer cheapest airfare on international routes as well.
As per industry experts, these airlines will extend their services in the international market as soon as this rule is taken of the chart.
5/20 Rule
This rule states that carriers, which are set in the Indian market, have to operate for at least 5 years in the domestic market and own at least 20 aircraft before commencing international services. Aviation rules were drafted a few decades back, in accord with the erstwhile scenario. For instance, this 5/20 clause was added for the utmost safety of fliers. Earlier, new enterprises took a bold step to enter in the aviation business because of its wide scope and rewarding nature. However, all of them were new in this area and international market is too big as well as risky for amateurs. In order to make sure that everything goes well, these carriers were asked by aviation authorities to operate for five years in the Indian market. Similarly, the 20 aircraft term ensured that they do not fall short of resources in the future. Nowadays, recently launched cheap airlines in India are either a part of renowned global airlines or owned by them.
Present Significance
As mentioned earlier, recently launched domestic airlines in India are operated under companies, which have been handling such operations for years. Hence, the rule is not relevant in the current market situations. The government is also looking forward to nullify its. This will help carrier like Vistara and AirAsia to offer cheapest airfare on international routes as well.
As per industry experts, these airlines will extend their services in the international market as soon as this rule is taken of the chart.
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