India's 1937 law stalls AirAsia's bid to start flights

[NEW DELHI] AirAsia Bhd, the region's biggest budget airline, is aiming to start flights in India and bring more competition to one of the world's fastest growing markets. The only thing standing in the way: a law dating back to the 1930s.

India's aviation regulator invoked a provision under its Aircraft Rules 1937, for the first time, asking for public feedback on an application by an airline to start services in the country. That delayed plans for AirAsia, which had aimed to start operations by the end of December and offer free tickets for some seats.

"This is unfortunate, unwarranted and sets a dangerous precedent…