What to expect from Civil Aviation Policy of India
Air Travel is the safest and the fastest mode of travel in the world. Aviation industry has been very fluctuating since its inception. The last decade was a nightmare for everyone who belongs to this niche sector. Every airline was bearing huge loss except for Indigo Airlines (proud moment) and to make the matter worst Kingfisher Airline was declared bankrupted. On the other Air India was sucking huge sum of tax payer’s money. The scenario has been changed and lot of good news is coming again from all the corners. The fresh Airlines are getting started and new recruitments are happening every month. But to keep this happy atmosphere for a longer period the government needs to make some changes in its rule book. The much awaited aviation policy is likely get cleared by PMO and finance by the end of September. The controversial 5/20 rule must be revised, according to which in order to fly international routes an airline in must have completed 5years in domestic operations and have a fleet size of at least 20 aircrafts.
The Draft Civil Aviation Policy aims to reduce airline operational cost and to make air travel accessible for everyone. The Civil Aviation Policy is going to discuss about ensuring at least one flight per year for a middle class family in India said by G Asok Kumar, joint secretary in the ministry of civil aviation. It is important to understand here that the development of the civil aviation sector has a very high multiplier effect on the economy. According to a study done by the International Civil Aviation Organization (ICAO) the output multiplier and employment multiplier are 3.25 and 6.10 respectively. In other words, every 100 rupees spent on air travel would result in 325 rupees worth of total benefits, and every 100 direct jobs in aviation would result in 610 jobs.
Following are concerned issues addressed in the DRAFT CIVIL AVIATION POLICY OF INDIA.
Development of airports:
India has about 132 airports at present, out of which 46 domestic and 15 International airports run by Airport Authority of India. 31 airports are non-operational. The new policy focus on connecting small cities to metro cities and airport would act as connecting hub. An integrated multi-modal hub should include metro, rail, , bus and truck connectivity as well as accommodation and other services.
Rationalizing the cost of Aviation Turbine Fuel (ATF):
The cost of ATF in India is 40 to 45% higher than the international costs because of high rate of taxes. Steps will be taken in association with Ministry of Finance and state Government to lower down the cost of ATF.ATF is responsible for 40% of the operational cost.
Enhancing Regional Connectivity:
Government’s objective will be to provide optimum air connectivity to all regions, subject to commercial viability. A special package will be developed for the North-Eastern Region to improve air connectivity and provide linkages to remote locations. The Route Dispersal Guidelines will be reviewed with the objective of encouraging Indian carriers to enhance regional connectivity through deployment of small aircrafts and code sharing arrangements. The 5/20 guidelines will be reviewed with a view to encouraging the entry of new Indian carriers.
Maintenance, Repair and Overhaul (MRO) facilities:
This is the one of the major segment of this industry with a turnover of around 700 million dollars per annum. Due to lack of infrastructure and facilities most of the business is going outside the country.
Steps will be taken to develop facilities and also taxes will be revised in order to attract investors.
Modernization of Air Navigation Services (ANS):
For development of the civil aviation sector, provision of Air Navigation Services (ANS) of international standards is essential. The Airports Authority of India has taken several initiatives in this direction. These would be intensified with the objective of reducing flying time, elimination of crowding 4 at airports, direct routing of aircrafts from destination to destination and enhancing communication and navigation services to international standards.
Development of Helicopter Aviation:
This is a segment which has huge potential for growth. It is very useful in carrying operation in congested areas, medical emergency, evacuation, law and order, oil exploration etc. Helipads will be developed in areas with sufficient potential and incentive will be given operator to minimize the operational cost.
The functioning of Ministry of Civil Aviation and the offices under the Ministry will be digitized to improve efficiency and transparency. The services and clearances to be given by different agencies will be made online. Electronic procurement systems will be strengthened to ensure transparency and accountability.