The fight between ‘old’ Indian carriers and start-ups — Tata Group JVs Vistara and AirAsia India Pvt Ltd (AAIPL) — over relaxing rules for desi airlines to fly abroad has intensified.
The aviation ministry has engaged consulting major KPMG to provide inputs for new aviation policy. ‘Old’ airlines have told the ministry that KPMG has been ‘involved’ with Vistara and allege a conflict of interest in the consulting firm being asked to give inputs for the new policy, which is expected to lay a relaxed roadmap for Indian carriers to fly abroad.
Vistara has engaged KPMG for some projects in recent months. Industry sources, however, say KPMG has worked with almost all Indian airlines, airport operators and the aviation ministry.
The old airlines are not in favour of relaxing the so-called 5/20 rule — under which an Indian carrier must be at least five year old and have 20 planes in its fleet to fly abroad. The new airlines, on the other hand, want that rule to go as soon as possible so that they can start overseas flights.
The Tatas have Singapore Airline and Malaysian low-cost carrier (LCC) AirAsia as partners in Vistara and AAIPL, respectively. While AAIPL operates single aisle Airbus A320s, Vistara has even indicated that it would like to start longhaul international flights from India using widebody jets.
The ‘old’ airlines, which include IndiGo and SpiceJet, say they have bled a lot in meeting the 5/20 rule and that it should not be relaxed to benefit the new players. Air India and Jet started their international operations before this rule was framed.
The Federation of Indian Airlines (FIA), an umbrella body of old Indian carriers that refuses to accept Vistara and AAIPL as Indian airlines, is learnt to take up the issue of KPMG’s alleged conflict of interest with the aviation ministry. KPMG aviation head Amber Dubey did not comment on the issue.
The aviation ministry, under its new secretary R N Choubey, is drafting a new aviation policy that will, among other things, lay the roadmap for Indian airlines to fly abroad by doing away with the 5/20 rule.
