The proposed new civil aviation policy signals an important step towards reform by scrapping the 5/20 rule, which has long hindered the growth of individual airlines and of the sector. The rule, which requires domestic carriers to have a fleet of 20 aircraft and five years of operational experience in order to commence international services, skewed the field against new entrants by emphasising time over passenger miles. As per the new rules, an airline would need a minimum of five aircraft and 200 crore domestic flying credits (DFCs) before flying an international route.
This would require the airline to provide connectivity to underserved areas. But the carrier could benefit from the multiplier effect of DFCs earned from Category II and IIA routes and unused airports. Scheduled airlines may also be able to purchase DFCs from small, unscheduled carriers which fly remote routes, benefiting both parties. This formula, applied to new airlines and new routes allotted to old airlines, may enable an airline to begin international operations within a year. But it still doesn’t go far enough, since pilot experience and safety are the ideal determining criteria, not years or miles.
Meanwhile, Abu Dhabi, Dubai and Singapore have grown as aviation hubs at India’s expense. With the economy growing again and oil prices at a historic low, 2015 is a make or break year for India’s civil aviation. The final policy to be notified later this month should reflect a commitment to take on the challenge.
