More reports on: Government policies

New civil aviation policy focuses on connectivity, cheaper travel

news
15 June 2016

The union cabinet has approved a new civil aviation policy, which incorporates several measures that could make air travel cheaper and open up more airline options for international travel, while boosting domestic, regional air travel.

Under the first integrated civil aviation policy announced since Independence, the government has scrapped the controversial '5/20' aviation rule that restricted domestic airlines to operate on international routes. Any airline that has a fleet of over 20 aircraft or deploys 20 per cent of its capacity on domestic routes can now fly overseas.

This will provide a level playing field by allowing all airlines, both new and old, to commence international operations provided they continue to meet some obligation for domestic operation and fleet norms.

The new aviation policy proposes to cap airfares at Rs1,200 for 30 minutes, and Rs2,500 for hour-long flights.

In order to improve regional connectivity, the civil aviation policy proposes to set up a Regional Connectivity Fund (RCF) by charging a "small levy" on all domestic flights.

Airlines will be required to serve more flights to North East India and island territories. The minister said that for any cancellations of routes in the North East airlines will have to notify the ministry.
 
On bilateral traffic rules, the government is going to be ''progressive'', the minister said, adding that India will seek a reciprocal 'open sky' policy with SAARC countries and countries that are more than 5,000 km away from India. For countries located within 5,000 km from India, the methodology for additional entitlements for domestic carriers will be worked out. India has bilateral traffic or air service agreements with 109 countries.

Domestic airlines will not require prior approval before entering code share agreements with other airlines.

The existing ground handling policy is being replaced with a new framework to ensure fair competition. The airport operator will ensure that there will be three Ground Handling Agencies (GHA), including Air India's subsidiary/JV at all major airports as defined in AERA Act 2008. At non-major airports, the airport operator will decide on the number of ground handling agencies, based on the traffic output, airside and terminal building capacity. All domestic scheduled airline operators, including helicopter operators, will be free to carry out self-handling at all airports. Hiring of employees through manpower supplier will not be permitted.

All domestic airlines can now do self-handling without beaching security. As costs of outsourcing reduce, the ticket prices should come down, according to him. In general, the ground handling policy ''should be such that brings down the operational cost of airlines,'' he said.

There will be separate rules for helicopters. India will look at four heli-hubs and introduce helicopter emergency services.

The ministry will continue to encourage development of airports by the state government or the private sector or in PPP mode and endeavour to provide regulatory certainty. Future greenfield and brownfield airports will have cost efficient functionality with no compromise on safety and security.

Airport Authority of India (AAI) will continue to develop and modernise its airports and upgrade quality of services. AAI will be suitably compensated in case a new greenfield airport is approved in future within 150 km radius of an existing operational AAI airport which is not yet saturated.

The ministry will continue to encourage development of airports by the state government or the private sector or in PPP mode and endeavour to provide regulatory certainty. Future greenfield and brownfield airports will have cost efficient functionality with no compromise on safety and security.

Airport Authority of India (AAI) will continue to develop and modernise its airports and upgrade quality of services. AAI will be suitably compensated in case a new greenfield airport is approved in future within 150 km radius of an existing operational AAI airport which is not yet saturated.

India is expected to become the third largest civil aviation market by 2022 from ninth at present with the number of passengers growing from 80 million in 2015 to 300 million by 2022 and cargo volumes increasing four-fold to 10 million tonnes by 2027.

Airports having scheduled commercial flights are expected to increase from 77 in 2016 to 127 by 2019.

By providing incentives to associated facilities like aircraft maintenance services the country can develop into a MRO hub in South Asia. This calls for ensuring availability of quality certified 3.3 lakh skilled personnel by 2025.

These are part of the government's efforts to enhance the ease of doing business through deregulation, simplified procedures and e-governance and promoting 'Make In India' in the civil aviation sector, says a ministry release.





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