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INDIAN AFFAIRS
AIR INDIA CHANGES STAND ON 5/20 RULE TO ALLOW PRIVATE AIRLINES TO FLY ABROAD
January 18, 2016
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1.National carrier Air India, marking a major shift in its stance, has dropped its resistance to abolish five years and 20 aircraft norms, also known as 5/20 rule, for Indian carriers to be able to fly abroad.

2.Air India, which is struggling to return to profitability has conveyed to the government in a recent meeting that it will not oppose the ‘5/20 rule’ if it is abolished, a senior AI official said.

3.However, the new airlines — Vistara and AirAsia India — are in favour of scrapping the decade-old rule which is restricting them to fly to international airports from India.

4.This tug of war between the old and the new airlines has put pressure on the Union government to do away with the rule.

5.In fact, the draft civil aviation policy has been delayed mainly due to the government’s unclear stand over the ‘5/20 rule.’ The government is evaluating three options — keeping the rule, completely doing away with it or replacing it with a credit-based system.

6.The shift in stand by AI will give more room to the government to abolish the rule thereby helping Vistara and AirAsia India to fly abroad.

7.The present AI management, under its new Chairman and Managing Director Ahwani Lohani, is believed to have told the government in a recent meeting that the 5/20 rule is an “external factor” which will not have much impact over the airline’s performance.