Industrialist Ratan Tata accuses older airlines of MONOPOLY

Top industrialist Ratan Tata on Sunday locked horns with a group of airlines batting for continuation of a rule that prohibits newbies from operating international services, saying such “protectionist and monopolistic” pressures arise from a fear of competition.

itting out at older carriers, top industrialist Ratan Tata on Sunday accused them of lobbying and using “monopolistic pressures” to retain preferential treatment under the controversial 5/20 rule that restricts overseas flying by new airlines.

Reacting strongly to the charge, low-cost carrier SpiceJet’s chief Ajay Singh asked him to rather advice the two airlines associated with Tatas – Vistara and AirAsia India – to first serve India and then seek to fly international.

Singh also alleged that the two carriers were apparently controlled by their foreign parents and said they had undertaken, while applying for the licence, to follow the 5/20 rule which they are opposing so vehemently now.

AirAsia India and Vistara – two airlines operated by the Tatas through joint ventures – are presently ineligible to operate overseas under the 5/20 norm, which requires an Indian carrier to have minimum five years operational experience and at least 20 planes to operate international flights.

The government is currently in advanced stage of finalizing its new civil aviation policy, wherein one of the proposals is to scrap the 5/20 rule.

These airlines had to go by the rule, and they do not want new airlines like AirAsia India and Vistara to get the option to fly abroad without going through the rule. Tata Sons owns a majority stake in Vistara, while it has minority stakes in low-budget AirAsia India. “The lobbying for discriminating policies between old and new airlines is reminiscent of the protectionist and monopolistic pressures by vested interests’ entities who seem to fear competition, as in a variety of other sectors over the years. These protectionist moves have held back progress in India compared with open economies that have thrived on competition overseas,” Tata said in a statement posted on Twitter.

“One hopes when the new (aviation) policy is introduced, it will be free of discrimination and protectionism, so that Indian aviation can grow for the benefit of the consumer and the common man and not to serve the interests of select beneficiaries of protectionism,” he said.

Responding to Tata, rival SpiceJet’s Chairman Ajay Singh said that he should ask Vistara and AirAsia to serve India, before getting to fly international. According to him, all airlines were asked “to serve our great country, before we got profitable rights to fly abroad”, under the 5/20 rule.

“We served with great pride. What is wrong if these two foreign-controlled airlines are also asked to serve India, before being allowed to fly international? Mr Tata, whom we respect greatly, should in fact urge these airlines in which his group is a shareholder, to serve India willingly before being allowed to fly international,” Singh was quoted by PTI as saying.

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