Thursday, June 16, 2016

India Removes '5' from '5/20 Rule'

India has finally announced long-anticipated changes to its aviation policy. Significantly, airlines will no longer be required to operate domestically for five years prior to serving international routes, though they still must deploy 20 aircraft or 20 percent of capacity, whichever is higher, on domestic routes. This essentially amends the infamous 5/20 rule, so that fleet size is the only threshold a new airline must cross before expanding to international operations. The change is expected to increase interest and investment by foreign airlines in locally-owned subsidiaries or partnership ventures. Other changes rumored to be under consideration such as privatization of Air India or auctioning of traffic rights are absent from the newly announced policy.

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