Indian start-up airline eyes international markets

Indian start-up airline eyes international markets

Vistara, the Indian start-up airline formed up by India’s Tata group and Singapore Airlines, is eyeing the lucrative market for international travel.

A month after its maiden flight, the full service airline catering for business travellers as well as holidaymakers, hopes to tap into the country’s rapidly growing international travel market.

“We have global ambitions,” Phee Teik Yeoh, chief executive of Vistara’s parent company Tata SIA Airlines, told the Financial Times.

“We can support regional connectivity and at the same time promote growth in the economy by linking India to the rest of the world.”

But current rules restrict Indian-registered airlines to fly overseas only once they have operated domestic flights for five years and have at least 20 aircraft in their fleet.

Vistara and AirAsia India, a subsidiary of Malaysian low-cost carrier AirAsia, are both pressing for the so-called ‘5/20 rule’ to be abolished so they can start feeding Indian passengers to their foreign parent carrier’s international networks.

AirAsia India chief executive Mittu Chandilya said: “It’s an archaic rule which is totally contrary to open skies.

“Nowhere in the world is there a rule like this. People are crying for low fares to go abroad – for more connectivity and more destinations.”

The Indian government is now considering a gradual phase-out of the 2/50 rule, and a system of credits through which new airlines can earn the right to fly abroad by going to remote destinations in India.

But Chandilya said: “It’s a rule that needs to be abolished in its entirety, not with a piecemeal approach.”


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