News
India eases 5/20 rule and scraps foreign ownership caps for airlines
June 24th 2016
India, at last, has relaxed the unpopular 5/20 rule, which required local carriers to fly domestically for at least five years and operate 20 aircraft, before they were allowed to fly overseas. Read More » Under the policy change, Indian airlines now no longer need to wait five years to go abroad, as long as they deploy 20 aircraft or 20% of total capacity, whichever is higher, in the domestic market. Moreover, the government under Narendra Modi has announced that India-based airlines may now be 100%-foreign-owned, up from 49%, but only with prior approval from the government. Both changes were welcomed by start-up carriers, including Vistara and AirAsia India. More established airlines, including Air India and Jet Airways, had lobbied strongly against the amendments and were disappointed their arguments were overruled.
India’s minister for civil aviation, Ashok Gajapathi Raju, said the policies would aim to “take flying to the masses” by making it affordable and convenient, as well as enhancing regional connectivity. The Modi government’s overall goal is to make India the world’s third largest civil aviation market by 2022 after China and the U.S.
