The boss of India’s newest airline Vistara has urged the government to scrap a rule that restricts carriers in the country’s cut-throat aviation sector from expanding their operations abroad.
Phee Teik Yeoh, the Singaporean CEO of Vistara, which was launched last year, said that recent reforms were welcome but more needed to be done to help fledgling airlines.
Prime Minister Narendra Modi announced a long-awaited shake-up of the rapidly growing market in June, including amending a regulation known as the “5-20 rule”, which had been criticised by industry experts.
The new policy stipulates that Indian carriers no longer need to have been in operation for five years before they can fly internationally, as was previously the case.
But it insists that domestic airlines must still have 20 planes in their fleet before expanding to destinations overseas.
“We are happy to see the 5-20 rule’s partial lift, although we would like to see the complete removal of it in the near future,” Phee said.
“It would be the right decision in the right direction and would allow more choices for Indian travellers,” the 47-year-old added.
Carriers say scrapping the rule and allowing them to fly overseas is crucial to them turning an early profit while the government wants them to focus on improving India’s domestic network.
India’s aviation sector has undergone rapid transformation since a liberalisation drive first began in 2003 but budget airline IndiGo is the only consistently profitable carrier.
Vistara, a joint venture between Indian conglomerate Tata and Singapore Airlines, is seeking to capitalise on the Indian government plans to increase domestic ticket sales to 300 million by 2022 by making air travel affordable for the masses.
Only 70 million of India’s 1.2 billion citizens flew domestically in 2014-15, according to the Sydney-based Centre for Asia-Pacific Aviation, making it one of the world’s most under-penetrated markets. Danny Trevathan JerseyShare This