New Delhi: The long-awaited new civil aviation policy that seeks to ease rules for airlines to fly overseas and radically increase regional air connectivity has been cleared by the cabinet. It proposes a cap of Rs. 2,500 on one-hour flights.
The policy has gone through several rounds of inter-ministerial discussions over the last 18 months. The draft policy was revised in October 2015.
With the policy, the government plans to create an ecosystem that will lead to an increase in air travel. It hopes to see sale of 30 crore air tickets per year in the domestic sector by 2022 and 50 crore by 2027. For international travel, the target is 20 crore by 2027.
Aviation market has been waiting for the policy to know if the ‘5/20 rule’ that decides whether a new airlines can fly abroad will be fully or partially withdrawn. Currently, only carriers that have been in the business for at least five years and own a minimum of 20 aircraft can fly abroad.
The policy also proposes a regional connectivity scheme by offering sops to airlines. Incentives may be offered to airlines to fly on regional routes. The government has proposed a Rs. 2,500 cap for an hour’s flight on such routes to ensure affordability. But the new policy says the centre will refund 80 per cent of the losses incurred by airlines due to such caps.
The draft also had proposed a 2 per cent cess in domestic and international tickets for the regional connectivity fund to be set up.
Revival of old air strips as no frill airports, single window system for all aviation related transactions and complaints by aviation regulator – Directorate General of Civil Aviation OR DGCA – and real time safety tracking are the other important decisions that the policy will take up.
The policy has so far been delayed because of several reasons, key among them being the divide over how to allow foreign airlines to fly into India under bilateral arrangements. While Civil Aviation Minister Ashok Gajapathi Raju has been pushing for auction of flying rights, junior minister Mahesh Sharma is against it and has argued that no other country follows this option.