After Ratan Tata, Air Asia chief Tony Fernandes questions 5/20 norm

New Delhi: Close on the heels of Ratan Tata voicing his concerns over the 5/20 norm, Air Asia chief Tony Fernandes today jumped into the debate questioning whether the owners of Indian airlines lived in India,
after ratan tata air asia chief tony fernandes...
India TV Business Desk February 27, 2016 21:31 IST

New Delhi: Close on the heels of Ratan Tata voicing his concerns over the 5/20 norm, Air Asia chief Tony Fernandes today jumped into the debate questioning whether the owners of Indian airlines lived in India, in an apparent reference to Jet Airways' Naresh Goyal, an NRI living in the UK.

Air Asia India and Vistara - two airlines operated by the Tatas through joint ventures - are presently ineligible to operate overseas as the 5/20 norm requires an Indian carrier to have minimum five years domestic operational experience and at least 20 planes to go international.

Jet Airways, along with three budget carriers - IndiGo, SpiceJet and GoAir - are opposed to a change in the 5/20 regulation, for international flying by domestic carriers, which the government is mulling as part of its proposed new civil aviation policy.

"Reading all the stuff on TATA and Air Asia. Quite crazy 5/20 hasn't been solved. Are owners of Indian airlines living in India. Naresh? NRI," Fernandes said in a series of tweets.

Tata Sons runs joint venture airlines, Vistara and Air Asia India, with Singapore Airlines and Air Asia respectively. Arun Bhatia of Telestra Tradeplace is the third partner in Air Asia India.

Terming as sad the lobbying of incumbent airlines for "protection and preferential treatment", Chairman Emeritus of Tata Sons, Ratan Tata had last Sunday said such moves (for continuation of 5/20 norm) are reminiscent of the monopolistic pressures by entities with vested interests who fear competition.

The incumbent carriers under the banner of Federation of Indian Airlines (FIA) too hit back at Tata and the subsequent statement from Tata Sons alleging that the demand to call for removal of 5/20 was not in "national interest" but "self-interest" on the part of the Tata Sons and its partner airlines.

"People of India your voice needs to be heard more. For too long airlines have been controlled by a few. Mostly NRI. Competition is needed," Fernandes, whose airline Air Asia holds 49 per cent in Air Asia India, said in another tweet.

"Indians need more tourism. More jobs. Only country in the world with a 5/20 rule. Malaysia has foreign airlines operating here. No issue," he further tweeted.

Under the current FDI regulations, foreign airlines can own up to 49 per cent in domestic carriers while an NRI is allowed to hold 100 per cent in an airline.

However, FIA alleges that Air Asia India and Vistara were being controlled by their overseas stakeholders - Air Asia Bhd and Singapore Airlines, respectively, a charge which Tata Sons has denied.

Tata Sons claim that that the majority ownership and effective control of both airlines are with the Indian parties as per the government's requirement.

Responding to allegations of older airlines that Indian carriers can't set up an airline company in Malaysia, Fernandes tweeted, "Can't see why not. There is an Indonesian airline operating a MALAYSIAN aoc (air operator certificate)."

Along with finalizing the new civil aviation policy, which is in the advanced stage, the government also has to decide the fate of 5/20 norm.
 

(With PTI inputs)

 
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