Draft rules on flying abroad will push up fares: Mittu Chandilya

AirAsia India Chief Executive Officer Mittu Chandilya has criticised the government's proposed credit-based policy for international flights, terming it restrictive for new airlines. 

In an email, he said allowing new airlines to fly international was a step in the right direction, but the government needed to find common ground.

Excerpts: 

What are your views on credit slabs for foreign routes? 

The slabs for long-haul and short-haul international travel make no sense. In a budget airline cost efficiency is achieved by operating a single fleet.

In most cases, budget airlines use narrow bodied aircraft that have a range of up to four  hours. So, in essence, I can earn 300 credits but my planes cannot fly the routes I am eligible for.

To counter this, I will have to induct longer range aircraft that will break my low-cost model. The ultimate loser will be the flyer, who will have to pay more for tickets. 

How many aircraft will AirAsia require to reach 600 credits? 

We will need to deploy 16 aircraft for an entire year to accumulate 600 credits, not to mention the additional aircraft that will be required to actually fly these foreign routes.

Taking a pragmatic rollout and factoring in aircraft required on international routes, this could take two or three years and still require at least 20 aircraft. 

How long would it take for a new airline to achieve 200, 300, and 600 domestic flying credits? 

In general, with five aircraft (inducted in one year and assuming credits are not cumulative) it will take 18 months to achieve 200 credits, two years for 300 credits and four years for 600. 

Established airlines say new airlines should not complain because they will not have to fly for five years within India before venturing abroad... 

The proposed norms are restrictive for new airlines. Essentially, the newcomers are still at a disadvantage when it comes to flying international. 

The aviation ministry has linked route dispersal guidelines with easing of the five- year domestic flying and 20-aircraft rule. What's your view? 

Coupling of route dispersal guidelines with the 5/20 rule is fundamentally incorrect.

On the one hand, the government is defining how one deploys domestic capacity and then links that to how much one can fly international.

Linking the two means we are assuming domestic and international traffic are growing at the same rate.

This has adverse implications if the government wants Indian carriers to gain a larger share of international traffic. Ensuring service to remote areas is right, however, it should not be coupled with international flying. 

Also we find vague certain clauses regarding maintaining an “incident-free record” for one year to achieve international flying status.

These clauses are a grey area for the government to revoke our international status despite having accumulated the required credits.