• HOME
  • Aircraft
    • AIRFRAMES
      • Proud to fly a Turboprop: Q400 vs ATR72
      • Airbus A320 Experience
    • SYSTEMS
      • Pratt and Whitney PW1100G Geared Turbofan Engine
      • Winglets and Sharklets
      • Cockpit Design: EPR v/s N1 indication
      • Boeing’s MAX, Southwest’s 737
      • GPS to the rescue!
    • ACCIDENTS AND INCIDENTS
      • LOT 767 Gear Up Landing
      • Iran Air 743:Partial Gear Up Landing
  • AIRLINE
    • ANALYSIS
      • IndiGo performs well in Q3’16, but is outshone by Q1’16
      • SpiceJet: Q1’16 Operational Financials Forecast
      • Vistara – Review & Analysis
      • AirAsia India – Q2FY15 performance and outlook
      • Q2 results and Prof. Sanjiv Kapoor’s introductory class on Airline Economics
      • SpiceJet in Q(2) – Great Performance in Testing Times.
      • Could SpiceJet have been profitable in FY2013-14?
      • Interlysis – AirAsia India and Mrithyunjaya Chandilya
      • A glimpse of Tony’s AirAsia India, and his success mantra
      • Interlysis with Shyson Thomas – Air Pegasus, Unplugged.
    • EVENTS
      • AirAsia India-and the competition-gets real
      • Spicejet’s inaugural Bangalore-Bangkok Run
      • Spicejet unveils the Q400s
    • HUMAN FACTORS
      • Dissatisfied Flightcrew
      • Love is in “the air”
      • Captain Dad and kid First Officer
      • Cathay’s Young Cabin Crew!
  • AVIATION
    • The Indian Aviation 2015 growth story deciphered
    • National Civil Aviation Policy 2015
      • Safety
      • Regional Connectivity Scheme (RCS)
      • The 5/20 Rule
      • Route Dispersal Guidelines
      • Scheduled Commuter Airlines (SCAs)
      • Aviation Education & Skill Development
    • 2014: A year flown by
    • 2013: A year flown by
    • Training
      • Familiarization Flights for ATCOs
      • A320 FFS LOFT Session
      • HINDUSTAN GROUP OF INSTITUTIONS: AN AVIATION UNIVERSITY
        • Hindustan Institute of Engineering and Technology (HIET)
        • Hindustan Institute of Technology & Science (HITS): Hindustan University
        • Orient Flight School (OFS)
      • IGRUA
      • NFTI: Rising to the Top, and how
      • Aerospace Engineering in India: the Gaps
      • Chief Flying Instructors
    • PEOPLE
      • Radka Máchová
      • Rodrigo David: The man behind some of the best A320 flightdeck videos
    • TECHNOLOGY
      • GAGAN: India’s first step to a Future Air Navigation System (FANS)
  • PROJECTS
    • AIRBUS TECH
      • About PAT
      • AIRCON/PRESSURIZATION/VENTILATION
      • AUTOFLIGHT
      • COMMUNICATION SYSTEMS
      • ELECTRICAL SYSTEMS
      • FIRE PROTECTION SYSTEMS
      • FLIGHT CONTROLS
      • FUEL SYSTEMS
      • HYDRAULIC SYSTEMS
      • ICE AND RAIN PROTECTION
      • LANDING GEAR
      • LIGHTS
      • OXYGEN
      • PNEUMATICS
      • APU
      • DOORS
      • POWER PLANT (IAE)
    • ATR9X
      • About ATR 9X
      • Logbook
      • Introduction
      • Fuselage
    • General Aviation Flight Simulator
    • Dual Cyliner Rotax Electronic Engine-Kill Switch
    • Making a Lynx Micro Headset Charger on the Go!
  • ABOUT
    • About The Flying Engineer
    • Advertising
    • Merchandise

The Flying Engineer

~ Technically and Operationally Commercial Aviation

The Flying Engineer

Tag Archives: unjust

Why the FIA’s case against the removal of the 5/20 rule is unjustified

25 Thursday Feb 2016

Posted by theflyingengineer in Air India, AirAsia India, General Aviation Interest, Go Air, IndiGo, Jet Airways, SpiceJet, TATA-SIA, Vistara

≈ 2 Comments

Tags

20, 5, Air, Airlines, Airways, India, Indigo, Jet, justification, Rule, Spicejet, unjust

DEL Arpt

Today, India, for the size that it is, has only four airlines that fly international: Full service carriers (FSCs) Air India and its subsidiaries, and Jet Airways, and Low cost carriers (LCCs) SpiceJet and IndiGo. This is in contrast to the 10 airlines that operate domestic scheduled services in India, today. While Indian carriers flew 81 million domestic passengers in calendar year 2015 (CY2015), Indian carriers flew only 18 million passengers in the same period.

Only two airlines/airline groups operate short, medium and long haul international services: Air India and Jet Airways. Both airlines have diverse fleets: from short haul domestic ATR 72 turboprops to long haul international Boeing 777s. The LCCs in contrast have narrowbody jets that can cater only to short haul international services.

Due to the limitations of fleet and perhaps the lack of commercially attractive international destinations, LCCs IndiGo and SpiceJet deployed only 4.8% and 9.5% of their total flights on international, in CY2015. In contrast, Jet Airways (Including operations from the Jetlite AOP) deployed 22.1%, while Air India (Including Air India Express and Air India Regional (Alliance)) deployed 32.7% of its total flights on international. Air India and Jet Airways together contribute to 84.5% of all international departures by Indian carriers, while IndiGo and SpiceJet contribute to just 8.8% and 6.8% respectively.

This statistic shows IndiGo and SpiceJet are very small players in the international front, serving destinations at neighbouring countries. IndiGo operates only to five international destinations: Kathmandu (Nepal), Muscat (Oman), Singapore (Singapore), Bangkok (Thailand), and Dubai (U.A.E.), while SpiceJet operates only to six international destinations: Bangkok (Thailand), Colombo (Sri Lanka), Dubai (U.A.E), Kabul (Afghanistan), Male (Maldives), and Muscat (Oman).

Air India and Jet Airways started operations before the 5/20 rule was instated in the year 2005. IndiGo and SpiceJet started operations after the 5/20 rule was introduced. The 5/20 rule requires airlines to operate domestic services for a minimum period of five years, after which it can fly international only if the airline has a fleet size of 20 or greater.

Air India Express was the only airline to start immediate international operations (although on an AOP different from Air India) after the 5/20 rule was introduced. The first flight of the airline was an international flight.

Neither IndiGo nor SpiceJet fought the 5/20 rule at that time as the focus of both airlines then, as it is today, is to tap the potential of the domestic market. SpiceJet started international operations in October 2010, while IndiGo commenced international operations in September 2011. Despite both LCCs having started international operations nearly five years ago, when the scale of domestic operations were smaller, both airlines chose not to focus on international operations. (See IndiGo’s fleet induction, here) Both airlines always had the option of inducting larger aircraft to serve destinations beyond the surrounding Asian and Middle East countries. But such is not their business model.

As a result, the only Indian carriers to majorly serve international are Air India and Jet Airways, both of which were not ‘victims’ of the 5/20 rule, whereas IndiGo and SpiceJet, which chose to focus on domestic even though they started international operations five years ago, are ‘victims’ of the 5/20 rule, strongly opposing the removal of the a rule that means nothing, and does not impact either airline..

Go Air

Go Air started operations in the year 2005, but chose not to increase its fleet beyond 19 aircraft. It deferred its 20th aircraft, which was readied by Airbus. As a result, the airline does not fly international, and seems to have no issues remaining a domestic player. Yet, the airline opposes the removal of the 5/20 rule, though it chose not to operate international.

Wasted capacity

In the quarter ending 31st December 2015, a total of 12.6 million international passengers were carried by both Indian and international airlines. Of that number, Indian carriers flew just 4.5 million passengers, or just 36% of the total traffic.

India is underutilising its bilaterals, due to restrictions placed by rules such as the 5/20. For the purpose of this case, and for want of time, we consider only three international destinations: Singapore, Bangkok, and Kuala Lumpur.

Stats India Foreign Airline

As of late February 2016, there are three airlines from Singapore that operate to 13 destinations in India. Singapore Airlines, Tiger Airways and Silk Air together operate 134 flights per week to India, from Singapore, and an equal number of return flights. Together, the airlines deploy 30,517 seats per week between Singapore and India, in each direction, using a variety of aircraft: Airbus A319s, A320s, Boeing 737-800s, Airbus A330s, Boeing 777-200s, 777-300s, and Airbus A380.

In contrast, three Indian airlines (four if you count Air India Express separately) connect Singapore to only four destinations in India. Air India, Air India Express, Jet Airways and IndiGo together operate 63 flights per week between the two countries. Together, the airlines deploy just 13,244 seats per week between Singapore and India, in each direction, using Airbus A320s, Boeing 737-800s, Airbus A330-300s, and Boeing 787-8s.

Thai Airways, Thai AirAsia, and Bangkok Airways operate from Bangkok to eight destinations in India, flying 73 flights and deploying 19,497 seats per week, Using Airbus A320s, Boeing 747s, 777-200s, 777-300s, Airbus A330-300s, and Boeing 787-8s.

In contrast, SpiceJet, IndiGo, Jet Airways and Air India together operate 62 flights, deploying 12,474 seats per week, from four Indian destinations to Bangkok, using Airbus A320s, Boeing 737-800s, 737-900s, and Boeing 787-8s.

From Kuala Lumpur, AirAsia Berhad, AirAsia X, Malindo, and Malaysian Airlines operate 180 flights to 12 Indian destinations, deploying 32,903 seats per week between Malaysia and India, using Airbus A320s, Boeing 737-800s, 737-900s, and Airbus A330-300s.

In contrast, only Air India Express operates to Kuala Lumpur, connecting only Chennai to the Malaysian capital with 4 weekly flights and deploying 744 seats per week.

While not all destinations are commercially viable, there is a huge mismatch between the capacity deployed by foreign carriers, and the capacity deployed by Indian carriers, on the same set of routes. Infact, the superior connectivity offered by foreign carriers is not matched by Indian carriers, leaving a large scope for more Indian carriers to boost the Indian economy while also providing international passengers seamless domestic connectivity.

The 5/20 rule must go if India should see it’s own airlines connect India with the rest of the world.

What the FIA won’t tell you

The Federation of Indian Airlines (FIA), have something against the airlines of the Father of Indian Aviation (FIA), Late JRD Tata. The Tata’s have already done enough to promote connectivity within India: TATA airlines was renamed Air India.

The FIA (Federation) is shaken by the prospects of airlines such as Vistara and AirAsia India. The goal of the FIA is to restrict the operations of such airlines to within India, so that players like the market leader can use its low cost base to lower fares on every route such airlines fly, and bleed the airlines dry. Starting with the smallest and the least capitalised airlines, airlines will knock off the Indian scene, one by one, leaving only a few to operate in India, with the market player enjoying a huge monopoly in setting fares. At that point in time, India will suffer, with neither good international connectivity, nor with strong domestic competition nor worthy alternatives.

While the FIA blames consultancy firm KPMG of auditing Singapore Airlines and consulting for the government, it remains silent on consultancy firm CAPA.

CAPA India, in its Aviation Outlook 2016, stated, “Despite repeated statements by the Minister that there is no logic to the 5/20 rule and that it should be abolished, the discriminatory regulation still remains in place”.

Guess which consultancy firm’s services was sought for IndiGo’s Red Herring Prospectus? CAPA India.

Referred by:

Referred by:

Project:

Project:

In Depth Articles:

In Depth Articles:

In Depth Articles:

RSS Feed

RSS Feed RSS - Posts

RSS Feed RSS - Comments

The Flying Engineer’s tweets

  • Couldn't have asked for a more glorious end. https://t.co/f9NYJgxYCL 2 weeks ago
  • Some hold the emergency door open. Regardless. twitter.com/mhdksafa/statu… 2 weeks ago
  • Embraer twitter.com/BrothaManBlack… 2 weeks ago
  • RT @jamiebsmith: Legroom is on point. Absolutely love the Embraer jets. https://t.co/wNpTJXm7uQ 2 weeks ago
  • @unraveaero @aditishahsays @AirLeaseCorp @Reuters @Airbus @Boeing Exactly what was on my mind but refrained from co… twitter.com/i/web/status/1… 2 weeks ago
Follow @TheFlyingEnggnr

Visit our Facebook Page

Visit our Facebook Page

Blog archives of The Flying Engineer

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 17,608 other subscribers

Site Statistics

  • 2,451,490 views

Top Posts & Pages

  • Pratt and Whitney PW1100G Geared Turbofan Engine
    Pratt and Whitney PW1100G Geared Turbofan Engine
  • Cockpit Design: EPR v/s N1 indication
    Cockpit Design: EPR v/s N1 indication
  • Winglets and Sharklets
    Winglets and Sharklets
  • Proud to fly a Turboprop: Q400 vs ATR72
    Proud to fly a Turboprop: Q400 vs ATR72
  • AIRCON/PRESSURIZATION/VENTILATION
    AIRCON/PRESSURIZATION/VENTILATION
  • MIN and MAX Acceleration Height
    MIN and MAX Acceleration Height
  • AUTOFLIGHT
    AUTOFLIGHT
  • HYDRAULIC SYSTEMS
    HYDRAULIC SYSTEMS
  • Fuselage
    Fuselage
  • Airbus A320NEO (A320-271N) receives Type Certification, IndiGo to soon receive first aircraft
    Airbus A320NEO (A320-271N) receives Type Certification, IndiGo to soon receive first aircraft

Recent Posts!

  • IndiGo receives its first Airbus A320neo at Toulouse
  • On the A320 Neo, if you’re unlucky, you’ve got the last row
  • Why the FIA’s case against the removal of the 5/20 rule is unjustified
  • Why the 90 seat Q400 had to be announced at the Singapore Air Show
  • Analysing IndiGo’s performance in Q3’16
  • Deciphering the 2015 Indian Aviation growth story
  • Air Costa receives its third Embraer E190 at Jordan
  • Why Jet Airways meant much for Brussels
  • Same aircraft family, different hands: Boeing 737NG flown by the Air Force and an airline
  • IndiGo to fly India’s longest daily domestic flight effective 7th January 2016

Blog at WordPress.com.

  • Follow Following
    • The Flying Engineer
    • Join 393 other followers
    • Already have a WordPress.com account? Log in now.
    • The Flying Engineer
    • Customize
    • Follow Following
    • Sign up
    • Log in
    • Report this content
    • View site in Reader
    • Manage subscriptions
    • Collapse this bar
 

Loading Comments...