New entrants should serve domestic market first: GoAir

NEW DELHI: Expressing reservations over the new entrants wanting to fly globally, budget carrier GoAir has said domestic market needs to be served first before spreading wings abroad.

"First of all the role of the industry (airlines) should be to develop a stronger domestic market... when they play a role, then lets allow them also to grow international (market)," GoAir chief executive Giorgio De Roni told PTI here in an interaction.

He was responding to a question whether the much-talked about 5/20 rule needs to be scrapped to allow all players irrespective of their operations fly overseas.

Budget carrier AirAsia India and the just-launched Vistara, which is a joint venture between Tata Sons and Singapore Airlines, have long been pitching for abolition of the 5/20 rule to fly international.

The rule allows an Indian carrier to operate international flights only after it has flown domestic for five years and has a 20-aircraft fleet, or change the rules to one year of domestic flying and having a five-plane fleet.

Even the Civil Aviation Minister Ashok Gajapathy Raju has on several occasions voiced his support to the demand for doing away with the 5/20 norm.

Stating that the Indian market should not fall to the foreign entities, De Roni said "we should have a foreign partners who supports the growth of the Indian market and have an existing airline to become stronger and stronger."

Competition can certainly play a role in this, he added. De Roni said that the GoAir's financial performance in the April-December period has been "better-than-expected" and the airline was likely to deliver higher profitability this fiscal also.

"We have flown 24 per cent more passengers in April-December year-on-year with slightly higher revenue per passengers."

GoAir reported profit though marginal despite the significant currency rate fluctuation last fiscal, he said adding,"This year we will be backed by a much higher profit compared to last year."

The Wadia group-owned budget carrier's net profit nosedived to Rs 5.44 crore in FY 14 from Rs 104 crore in fiscal 2012-13.