Draft new civil aviation policy focuses on connectivity, affordability
30 October 2015
The draft aviation policy unveiled by government today, aims at cutting down cost of airline operators so as to expand regional connectivity across the country and make air travel affordable for at least the middle class.
The government wants to ensure that the tariff is contained below Rs2,500 per ticket for each flying-hour through a host of incentives and other benefits to both airport developers and operators.
"A lot of consultation has taken place. We invite suggestions from stakeholders and public - since it involves the people of India. After all those suggestions come in, we will look into it," civil aviation minister Pusapati Ashok Gajapathi Raju said.
"The policy will also have a fixed period of existence, so that industry can plan in advance. That is the idea," the minister told a press conference to unveil the new draft.
The draft aviation policy also proposes a hike in foreign direct investment (FDI) in domestic airlines over 50 per cent in an open skies policy.
The new policy is likely to announce tax breaks for maintenance, repair and overhaul service providers as well as regional carriers, which will be periodically reviewed as and when required.
Lower operating costs will help operators open new routes and the policy, thus hopes to increase connectivity between smaller cities within a flying distance of one hour of flying.
According to industry sources, the air-fares between these cities will be capped at Rs2,500 per passenger and the balance of the cost will be paid back to these airlines by the government through the levy of a cess on national and international flights.
The plan is to levy a cess of 2 per cent on passengers taking commercial flights.
"The basic behind of National Civil Aviation Policy is to take flying to the masses," civil aviation secretary Rajiv Nayan Choubey said, adding, operators will get some doles to fly to smaller towns with incentives linked to fuel prices and inflation.
"We currently have some 430 airstrips and airports. But only around 90 in operation - nearly 300-odd are not being used. This is a huge unused asset. These airports will form the basis for enhancing our regional connectivity," Choubey added.
He said these will be upgraded into a no-frills airport at cost of Rs50 crore each.
Besides, to make operations in such airports feasible, the security will be aircraft-based - so that the airport is sanitised just around an hour or two before the flight.
The policy dwells on upgrade of airports, better regional connectivity, easing of norms for flying abroad, further liberalisation in open skies regime, development of cargo business, chopper services, attracting investments in maintenance sector, ground handling and security.
For an open skies regime, the draft policy proposes total liberalisation in time-bound manner, but based on a reciprocal arrangement from the partner country.
The policy draft will be open to comments from the industry and various stakeholders before the final policy will be shaped.