5/20 rule in Civil Aviation in India

The so called 5/20 rule is prevalent in civil aviation in India only and not other countries. This rule says that before an airline is allowed to fly abroad, it must be at least 5-year-old and must have at least 20 aircraft in its fleet. This implies that a domestic airline needs to have a fleet of 20 aircraft and operational experience of 5 years to start international operations.

Rationale behind 5/20 rule

This rule is in India only and the logic behind having such rule was that the domestic airlines must attain enough maturity and capability before they go international.

Implications and current status

The rule is bizarre and has pushed down the Indian players.  This is because of this policy that the government allows any foreign carrier to offer services here while younger domestic carriers are denied permission to fly overseas. Thus, it does not allow to create a genuinely competitive environment within the country.

Despite having bilateral air services agreements with more than 100 countries, India was unable to utilize its full potential. So there has been a demand from new players to scrap this rule. However, the incumbent airlines have supported this rule to avoid competition from new players. The current government is expected to replace the 5/20 rule with concept of so called Domestic Flying Credits (DFCs) system. In this system, instead of years, the domestic airlines will need to earn miles to go global. The airlines will earn points by flying to domestic / remote areas of the country; and once they have earned enough points; they will be eligible to go global.