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Business News/ Companies / Vistara steps up lobbying for relaxed overseas flying norms
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Vistara steps up lobbying for relaxed overseas flying norms

Airlines which have completed five years of continuous domestic operations and a fleet of at least 20 aircraft are allowed to ply international routes

Vistara chief executive Phee Teik Yeoh said the airline was committed to expanding its footprint in India even if the rules are not relaxed, but added that hubs like Dubai were weaning away India’s passengers. Premium
Vistara chief executive Phee Teik Yeoh said the airline was committed to expanding its footprint in India even if the rules are not relaxed, but added that hubs like Dubai were weaning away India’s passengers.

Vistara, the airline joint venture between Tata Sons Ltd and Singapore Airlines Ltd (SIA), stepped up lobbying for permission to fly abroad by releasing a study on Tuesday that, among other things, concludes that the dilution of international flying norms is critical to India’s economic growth.

Nine-month-old Vistara, run by Tata SIA Airlines Ltd, wants to fly abroad immediately but existing rules permit such flights only after an airline completes five years of continuous domestic operations and has a fleet of at least 20 aircraft. Existing airlines have opposed any relaxation of the rules.

The 23-page study titled Maximizing the contribution of aviation to the Indian economy was prepared by aviation consulting firm CAPA.

The study expects aviation to contribute $250 billion to the economy by 2025, up from $23 billion currently.

Mukund Rajan, a board member of Vistara, said the study was timely because it comes at a time the government is in the process of finalizing a draft civil aviation policy. He said he hoped it would help in adding value to that process.

Rajan made a strong pitch for opening up the skies further, saying only 26% of Indian bilateral flying rights were being used by existing Indian airlines.

“I can’t understand how any airline could possibly say that it is good for Indian aviation that the bulk of international traffic is carried not by any of these carriers but by foreign carriers," Rajan said at a press briefing in the national capital on Tuesday.

He said he would send a copy of the study to all other airlines and seek their cooperation.

“The industry will come around," he said.

IndiGo, Jet Airways, SpiceJet and GoAir have already written to the Prime Minister opposing any change to the rules.

Air India, which expects to be hurt the most, has also written to the government discouraging it from making any changes.

Rajan said low occupancy on Vistara planes was a minor issue which will sort itself out over time. “We are a long-term player so short-term issues are not going to impact us," he said.

Vistara chief executive Phee Teik Yeoh said the airline was committed to expanding its footprint in India even if the rules are not relaxed, but added that hubs like Dubai were weaning away India’s passengers. “Dubai’s gain is India’s loss," he said.

New York-based independent analyst and former Jet Airways CEO Steve Forte said the government faced a tough problem—the moment it considers liberalizing the rules, the established airlines will be up in arms.

“It is a dilemma," he said, “Perhaps a way out is to have a reducing scale scheme such as reducing the restriction to three years in 2016, two years in 2017 and zero starting in 2018. This way no one can say the government favours the Tatas."

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Published: 07 Oct 2015, 12:27 AM IST
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