5/20 Rule Hits Proposed Air Kerala's Gulf Aspirations

Published: 30th January 2015 06:01 AM  |   Last Updated: 30th January 2015 06:01 AM   |  A+A-

KOCHI/BENGALURU: Proposed state-run carrier Air Kerala is eager to take wings to the Gulf  albeit it has not received final clearances to commence operations from competent authorities.  A key stumbling block for the aspiring carrier is the contentious 5/20 (5-year operation with 20 aircraft) rule required for international route operations.

State of Aviation in India.JPGAir Kerala has been fancying its chances to get clearances to operate international routes in the wake of rising voices to aviation authorities asking for a rethink on this rule. However, many desi airline operators who had long sought for relaxation of this rule, seem to have a change of heart as the easing of the 5/20 rule will give ‘undue advantage’ to new carriers.

With keen interest in flying to the Gulf region over domestic operations, government authorities are leaving no stone unturned to give wings to their airline proposal.  “We are hopeful that the government will relax these (5/20) norms. The original purpose of Air Kerala is to serve Non Resident Keralites (NRKs) in the Gulf region by protecting them against exploitation. If domestic operations are started, they will not serve the true purpose of the project,” KC Joseph, NRK Affairs Minister of  Kerala told Express.

According to airline operators and analysts, India that aims to become one of the biggest civil aviation markets in the world by 2020 is said to have some of the most regressive regulations impeding the growth of the sector. Malaysia-based low cost carrier AirAsia had said that the 5/20 rule is not allowing India to tap the potential of tourism.

“Get rid of the 5-year 20-aircraft thing. You want to grow tourism, you want more airlines, look at a different tax regime for ATF. There are better ways of raising money. Look at Malaysian tourism, its booming. We don’t have any restrictions on flying international,” Tony Fernandes, the Indian born billionaire chairman of AirAsia said soon after his carrier launched operations in India.

Already reeling under mounting losses, airline operators are hoping  that the government will extend an ‘olive branch’.  Amber Dubey, Head of Defence and Aerospace at global consulting major KPMG lists out some of the other demands of the industry.

The list includes notifying Aviation Turbine Fuel (ATF) as a ‘declared good’, establishing an independent aeronautics commission and tax holidays among other demands to lighten the burden on airline operators. ATF accounts for almost 50% of operations cost and is said to be one of the highest in the region. Barring low cost carrier IndiGo, most other carriers in India have posted losses. According to aviation analyst firm CAPA, all Indian airline operators are likely to post losses of $1.4 billion in 2014-15.

Apart from their Gulf aspirations, Air Kerala is looking to fly to domestic  destinations like Madurai, Tiruchirapalli, Coimbatore, Belagavi and Mangalore among other destinations.

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