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New Civil Aviation Policy Unveiled

  • Modifies 5/20 Rule
  • To Boost Regional Connectivity

By Vinay Kumar

NEW DELHI: The long-awaited and much deliberated upon National Civil Aviation Policy (NCAP) was unveiled on June 15. Apart from seeking to boost regional connectivity, the new policy has modified the contentious 5/20 rule, doing away with the need for a carrier to wait for five years before starting international operations.

“Any domestic airlines can start international operations if it puts higher of 20 aircraft or 20 per cent of total capacity on domestic routes,” Civil Aviation Minister Pusapati Ashok Gajpathi Raju said in a series of tweets.

In another airlines-friendly measure, the new policy also says that domestic airlines will not require any prior approval before entering into international code share agreements. While new entrants like TATA-SIA promoted Vistara and AirAsia were vehemently against continuing with the 5/20 rule, old players like Jet Airways were opposed to scrapping the rule.

The Civil Aviation Minister said in a tweet that the policy is a “game changer” and India’s aviation sector is poised to become the world’s third largest by 2022.

About eight months ago the Civil Aviation Ministry had come out with the revised draft and undertook several rounds of discussions with all stakeholders. The Ministry received some 450 suggestions which were examined before finalising the new policy, the first ever integrated national civil aviation policy.

In yet another tweet, Mr Raju said India would be the third largest civil aviation market by 2022. “To achieve this, we need right intentions, vision, planning and execution,” he said.

India’s domestic air traffic market logged the fastest growth globally for the 13th consecutive month in April. The market grew at nearly 22 per cent during April.

The new policy also encourages open skies concept on reciprocal basis for SAARC nations and countries beyond 5000 km.

It seeks to promote public-private-partnership (PPP) route for development of greenfield and brownfield airports by State governments and private sector.

To provide a proper framework for medical emergency services, it seeks to facilitate helicopter medical emergency services. It will also go ahead with development of four heli-hubs in the country, giving a boost to chopper services so that smaller distances could be covered.

In a bid to strengthen regional connectivity, the new policy puts a cap of Rs 2500 for flights of one hour duration. It also seeks to revive unused airports and routes in Tier II and Tier III cities.

The Minister tweeted: “Regional connectivity, cargo and maintenance, repair and overhaul (MRO) and skill development will be the focus areas” of the new policy. The MRO business of Indian carriers is around Rs 5000 crores and 90 per cent of which is currently spent outside India.

Further incentives proposed in the new policy to give a push to the MRO sector include asking the State governments to make VAT zero-rated on MRO activities, provision for land for MRO service providers in all future airport and heliport projects where potential for such MRO services exists and doing away with airport royalty and additional charges on MRO providers for a period of five years.

The Minister said the main objective of the policy was to make flying affordable, safe and convenient and promote balanced regional growth, tourism, infrastructure and ease of doing business.

On aviation education and skill building, senior government officials noted that estimated direct additional employment requirement of the civil aviation sector by 2025 will be about 3.3 lakh. They said that the Civil Aviation Ministry will provide full support to the aviation sector skill council and other similar organisations for imparting skills for the growing industry.

The Ministry will develop a scheme with budgetary support for type-rating of pilots as there are nearly 8,000 pilots holding Commercial Pilot Licences (CPL) but who have not found any regular employment. The detailed scheme is being worked out separately.