Cabinet clears civil aviation policy allowing new airlines to fly overseas

The new civil aviation policy will allow airlines to fly on foreign routes without completing 5 years of domestic operations, and boost regional flying, among other things

The Union cabinet on Wednesday cleared the civil aviation policy that aims to propel growth and allow new airlines like Vistara and AirAsia to fly abroad.

“The policy has been cleared with small changes,” an aviation ministry official said.

The policy will allow airlines to fly on foreign routes without completing 5 years of domestic operations, and boost regional flying, among other things.

Details of the policy are expected to be announced later in the day.

The policy was first presented in November 2014 and revised in October 2015 before being put up for public comments. Its introduction was delayed because of disagreements in several key areas.

With 80 million passengers already and growing at 20% annually, India is expected to become the third largest aviation market by 2020.

The aviation ministry has seen strong reactions and lobbying from older airlines such as IndiGo (InterGlobe Aviation Ltd), Jet Airways (India) Ltd, SpiceJet Ltd and GoAir and new entrants such as Vistara and AirAsia. The latter wanted the 5/20 rule scrapped, while older airlines wanted it to stay.

Under the 5/20 rule, airlines in India are permitted to fly abroad only if they have 5 years of domestic flying experience and at least 20 aircraft in their fleet.

The established airlines have threatened to move court if the government relaxes this provision. They want new airlines to also complete their term of five years of domestic flying before being allowed to fly abroad.