In aviation policy draft, India seeks to make air travel affordable

New Delhi, Oct 30 (IANS) Incentives to fly to small towns at affordable costs and easing the norms for domestic carriers to operate services abroad are some of the highlights of the new draft aviation policy, released on Friday for inputs from stakeholders before finalisation.

The primary aim of the policy is to ensure a tariff of no more than Rs.2,500 per ticket for each flying-hour with a host of incentives and other benefits to both airport developers and operators to make that happen.

“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,” said Civil Aviation Minister Pusapati Ashok Gajapathi Raju.

“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, along with his deputy Mahesh Sharma.

“The basic behind of National Civil Aviation Policy is to take flying to the masses,” said Civil Aviation Secretary Rajiv Nayan Choubey, adding that 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,” he added.

Choubey said these will be upgraded into a no-frills airport at cost of Rs.50 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.

It has proposed three ways forward on allowing domestic airline operators to fly abroad: One, to continue with the existing norm of five-year operation with a 20-aircraft fleet. Two, to abolish this altogether. Three, airlines be allowed to fly to SAARC nations if they have earned 300 domestic flying credits and for other countries, 600 domestic flying credits.

A final decision on the 5/20 rule will be taken by the cabinet, the secretary said.

“Our aim is to create an ecosystem that will enable 30 crore (30 million) domestic tickets per annum by 2022 and 50 core by 2027. Similarly, increase the international ticketing to 20 crore by 2017,” Choubey said.

The policy calls for levy of 2 percent cess on all domestic and international tickets on all routes other than Cat IIA and regional connectivity scheme. It proposes to put service tax at zero to promote the Maintenance, Repair and Overhaul facility.

The government proposes hiking foreign direct insurance (FDI) in domestic airlines to over 50 percent under the open skies policy.

Indian carriers ferried 67.38 million domestic passengers in 2014, to register a growth of 9.7 percent over the 61.43 million in the previous year. In the first nine months of this year, 59.02 million passengers were ferried to log a growth of 20.1 percent.

According to the official Make in India campaign, the domestic Indian civil aviation market — which has around 14 scheduled operators — is the ninth largest in the world and is projected to occupy the third spot by 2020.

Three international carriers current have stakes in scheduled Indian airlines in partnerships with domestic companies — Singapore Airlines with the Tatas, Air Asia again with the Tatas and Etihad with Jet Airways.

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