Air Asia boss tweet adds to aviation row

With Fernandes' dig at NRI owners of Indian operators, debate over changes in draft policy gets murkier

The debate over proposed changes in draft civil aviation policy turned murkier after AirAsia Group CEO Tony Fernandes asked if owners of Indian airlines stay in the country. “Are owners of Indian airlines staying in India?” Fernandes tweeted responding to allegations that AirAsia India is being remote controlled from Malayasia.

The Federation of Indian Airlines (FIA) which represents the older airlines IndiGo, SpiceJet, Go Air and Jet Airways had said that the two new airlines AirAsia and Vistara violates the guidelines of substantial ownership. “ With regard to compliance of Indian regulations related to substantial ownership and effective control by the Tata Group, which promotes Vistara and AirAsia leave a lot to be desired.

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• Dogfight in the skies

In AirAsia the Indian majority ownership is spread between two independent unrelated Indian shareholders who effectively have less shareholding than the foreign partner, namely AirAsia, Malaysia. De facto therefore, AirAsia, Malaysia is the largest shareholder,” FIA had earlier said.
 

Fernandes particularly took a dig at Jet Airways Chairman Naresh Goyal. Goyal, who is a Non-Resident Indian based in London. Similarly Rakesh Gangwal, co-founder of InterGlobe Aviation, which operates Indigo, is based in USA.

“ For long airlines have been controlled by a few. Mostly NRI,” Fernandes tweeted saying that India is the only country in the world which has 5/20 rule, says an airline cannot be eligible to do this till it is at least five years old and has at least 20 aircraft.



Abolishing the rule will benefit AirAsia and Vistara - two airlines in which Tata group owns substantial stake to immediately fly on the more profitable routes of abroad.

This comes a week after Ratan Tata, chairman emiretus of Tata group of companies said that older airlines were fearful of competition and hence lobbying for protectionism in Indian skies.

"The lobbying for discriminating policies between old and new airlines is reminiscent of the protectionist and monopolistic pressures by vested interests' entities who seem to fear competition, as in a variety of other sectors over the years. These protectionist moves have held back progress in India, compared to open economies that have thrived on competition overseas," Tata had said.

The FIA has threatened that they will pull the civil aviation ministry to court if the 5/20 rule is abolished.