'Domestic flying credits' proposal may replace '5/20' rule for airlines flying abroad

NEW DELHI: Airlines wishing to fly abroad may no longer have to wait for five years or spend tonnes of money in building a fleet if the government implements its proposal to replace the much-maligned '5/20' rule. The Centre has proposed a substantial simplification of procedures that could increase competition in foreign air travel while giving a much-needed leg up to the Tata-owned Vistara and AirAsia's India operations. It could also increase connectivity in India, pushing airlines to fly to more destinations, especially second and third-rung cities in the hinterland.

A new system of 'domestic flying credits' (DFCs) is being proposed as a replacement for a policy that used to reward airlines on the basis of fleet size and experience. Under the socalled '5/20' rule, airlines had to wait for five years and have a fleet of 20 aircraft before they could fly abroad. This put new airlines at a disadvantage while giving older carriers with more experience a head start.

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