Home BUSINESS AirAsia Case: CBI To Scrutinise Easing Of 5/20 Norms For Airlines

AirAsia Case: CBI To Scrutinise Easing Of 5/20 Norms For Airlines

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New Delhi: Soon after it was revealed that AirAsia India had tried to mend rules to get a relaxation on the 5/20 rule – followed by Indian airlines to operate international flights – the CBI has stepped in to investigate the matter and determine if the rule was relaxed for airlines by the current and previous governments, reported The Economic Times.

As per the 5/20 rule, airlines are required to at least have five years of local operations apart from 20 aircraft. The rule was has been tweaked by the present government under a new civil aviation policy but the CBI will now scrutinise the easing of norms as an attempt to bend the rules was initiated during the previous Congress rule.

According to the report, the investigative agency has now sought documents pertaining to the 5/20 rule that both regimes wanted to tweak. A senior government official confirmed to the publication that all ministries, including the civil aviation ministry, has been asked to share documents in connection with 5/20 norm relaxation in the previous government and also the norms followed to tweak the rule under the present government.

The CBI is attempting to study the documents to determine the procedure used to grant an international flying licence to AirAsia’s Indian venture. According to an official, the CBI has already sought documents on how what procedure was used to relax norms for AirAsia India under the FDI rules/

A few weeks ago, reports emerged that a proposal to relax the 5/20 rule was initiated in March 2012 at the behest of AirAsia, who had requested for a waiver on the same. While the cabinet note was floated for comments, the process came to a complete halt due to elections. However, the proposal was discarded in September 2014.

It may be noted that the cabinet in June 2016 tweaked the existing 5/20 rule and the rule has now been relaxed to 0/20 which only requires a new airline, seeking an international flying licence, to have 20 aircraft. The CBI has sought details and documents on these decisions as well.

It may be noted that the existing players in the aviation industry were not really impressed with the partial abolition of the 5/20 rule, the dividing the industry into two. It may be noted that only AirAsia and Vistara were in favour of the move.

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