Seat-share rules set off a war in the skies

Vistara and AirAsia India have argued that trading of RDG seats is the most market effective way of ensuring compliance, referring to it as a step to bring in level-playing field for new airlines

The Indian aviation industry is divided over the tweaking of Route Dispersal Guidelines (RDGs), which make it mandatory for airlines to fly between non-profitable, unserved and underserved routes. The proposed guideline change would allow airlines to trade seats between themselves, thereby making it easier for them to comply.

The aviation proposal is similar to the Reserve Bank of India norm that lets banks buy priority sector lending from each other. The RBI norm helps banks meet the condition of minimum 40 per cent lending to the priority sector, such as  agriculture and small enterprises.

Documents reviewed by Business Standard show that Tata-owned