The civil aviation ministry toughened the eligibility criteria for start-up airlines to commence international operations by increasing the required number of domestic flying credits (DFCs) for initial designation on a international route to 300 DFCs as compared with 200 proposed earlier.
The revised norms, designed to encourage long-haul operations, also stipulate that a new airlines will not be allowed to operate on international routes, which are less than 6 hours away, with 300 DFCs and will require to earn 600 DFCs to fly under six-hour routes. A senior offical in the ministry of civil aviation said, “We have tried to address the concern of all airlines. We have raised the eligibility criteria for flying on mid-haul routes so as not to divert traffic to hubs in West Asia and South-east Asia. Airlines will be encouraged to operate long-haul international flights.”
The new formula being proposed by the civil aviation ministry for permitting airlines to start international operations, once approved, will replace the ‘5/20’ norm. Currently, Indian airlines are required to have a fleet of 20 aircraft and five years of operational experience to start overseas flights.
A note for inter-ministerial consultation on the issue will be sent to concerned ministries by the end of the month. Airlines have been asked to respond with their queries by March 31, 2015. The joint secretary in charge for domestic transport G Ashok Kumar had called a meeting of all airlines on Wednesday to discuss the proposal to replace 5/20 rule. The meeting was attended by Vistara CEO Phee Teik Yeoh, SpiceJet COO Sanjiv Kapoor, IndiGo’s chief commercial officer Sanjay Kumar, airline executives and representatives for Federation of Indian Airlines and others.
Sources present in the meeting said that the airline representatives did not speak against the proposal in the meeting but did have questions on the formula for calculation of DFCs.
As per the new proposal, airlines will have to accumulate DFCs by flying to more cities in India and will have the right to fly overeas once the credits cross a certain threshold. These DFCs can be earned by flying to India’s top 20 cities and to smaller cities with airports.
The ministry has also proposed a buy-and-sell arrangement under which 25 per cent of such DFCs can be purchased from regional airlines or helicopter companies.