Civil Aviation Policy: Trading lower fees for higher taxes? - (15 Jun 2016)

MANU/PIBU/0476/2016

The Ministry of Civil Aviation released the National Civil Aviation Policy 2016 in hopes of expanding the aviation industry in India.

Its mission is simple: more flyers, greater connectivity and “safe, secure, affordable” air travel. Unfortunately, comfort, luxury, tablecloths and noise-cancelling headphones to muffle that adamant infant do not find mention.

The policy encompasses a three-pronged strategy: government concessions and assistance to reduce operating cost and increase opportunities for airlines; levelling the field for international operations, and; ancillary frameworks moulded to ease and encourage airline operations.

Notable is the Regional Connectivity Scheme, effective Q2 of 2016-2017, not for its “revival of un-served” airports, but with plans to limit fares to about Rs. 2500 for 500-600 kms of flying. Which regional airports are to be revived will depend on airline demand, and likely a Supreme Court order forcing Air India to commence operations there.

To increase seat availability and expand the industry, the Policy envisages, at least a temporary, reprieve from a plethora of airport fees and charges. The government will also subsidise various terminal services, and police and fire services will be provided free of charge by State governments.

Requirements for domestic carriers to begin international operations have also been modified, easing the earlier 5/20 scheme - fly for 5 years and have 20 aircraft in your fleet. Now, international operations are permitted once an airline deploys 20 aircraft or 20 per cent of total capacity for domestic operations.

Billionaires too rejoice! Helicopters have been permitted to fly freely point-to-point below 5000 feet, save in controlled airspace. The Directorate General of Civil Aviation is set to gain a separate helicopter cell to deal with requests and formulate policy for cheaper and easier helicopter access to airports.

And, of course, as no government policy will be complete without ‘Make in India’, the government hopes to give impetus to the domestic aeronautical industry. “Government will encourage global OEMs for establishment of aircraft assembly plant in India”; places of aero-manufacturing will be notified as SEZs.

It’s a worry that the policy sees its goals achieved by 2030 because that’s at least two decades too soon for HAL to reengineer this marvel. (See image)

Tags : CIVIL AVIATION POLICY AIRPORT CHARGES DEVELOPER FEE CONCESSION INTERNATIONAL FLIGHTS