Tata accuses older airlines of ‘monopoly’; SpiceJet hits back
Hitting 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 finalising its new civil aviation policy, wherein one of the proposals is to scrap the 5/20 rule.
While several older airlines including SpiceJet, Jet Airways, IndiGo and GoAir are vehemently opposing any move to scrap the 5/20 norm, Tata on Sunday applauded the Civil Aviation Ministry's proposal to remove the "controversial" rule.
Terming as sad the lobbying of incumbent airlines for "protection and preferential treatment", he tweeted that such moves were reminiscent of the monopolistic pressures by entities with vested interests who fear competition.
"The lobbying for discriminating policies between old and new airlines is reminiscent of protectionist and monopolistic pressures by vested interests' entities who seem to fear competition, as in a variety of other sectors over the years," Tata said in a strong message posted on his Twitter page.
"These protectionist moves have held back progress in India compared to open economies that have thrived on competition overseas," Tata Group's Chairman Emeritus said in his message titled '5/20 Rule and Vested Interests'.