Draft aviation policy to go to Cabinet next month

The draft civil aviation policy is likely to be sent to the Union Cabinet for approval next month, Rajiv Nayan Choubey, Secretary, Civil Aviation, said on Friday.  

The policy was put in the public domain on October 30 with the Ministry giving stakeholders 21 days to give their comments and suggestions. After going through the stakeholders’ suggestion the draft policy is expected to be finalised and sent to the Cabinet for its nod.

“We are proposing to take the integrated whole policy to the Cabinet for its approval,” he said. On the 5/20 rule, which stipulates that a domestic airline must have a fleet of 20 aircraft and must have operated on domestic routes for at least five years before becoming eligible for international flying rights, the policy gives three options to the Cabinet to consider — either retain the policy, drop it or replace it by a stipulation that domestic airlines earn domestic flying credits before becoming eligible to fly abroad.

Refuting the charge that the Ministry plans to cap flights on domestic regional routes at ₹2,500 an hour of flying, Choubey clarified that only those airlines that cap the fare at ₹2,500 will be eligible to receive viability gap funding (VGF) for such flights.

He said where there is demand from more than one operator for a particular route, the Ministry is likely to resort to reverse bidding with the route going to the operator which asks for the least amount of VGF.  

The Secretary also pointed out that the decision to cap fares at this level came from discussions with various airlines which felt that “there would be sufficient passenger demand” for travel on regional routes.

Choubey added that there is no minimum requirement of the number of States to come on board before starting the viability gap funding mechanism. “Wherever the State comes forward we will immediately commence it in that State,” he said.

The States, on their part, also have to do a number of things including bringing down VAT to 1 per cent or below on ATF supplied at regional connectivity airports, they have to agree to provide security free-of-cost, water and power at concessional rates and provide road connectivity for the scheme to start.

Choubey expressed the opinion that once the regional connectivity scheme is fully implemented across the country about 50 un-served airports will be revived.

From April 1 next year, India is likely to follow an open sky policy with countries which are at least 5,000 km away, Choubey said. European countries like France, Germany and the UK, North and South Americas and Canada could benefit from such a move.

“This (open sky) will possibly come into effect possibly from April 1… but we will have to take a call. Open sky brings in tremendous competition in the sector. The idea is to open up the civil aviation domestic market to competition in a graded or calibrated manner,” Choubey told newspersons.

The draft civil aviation policy states that the Government will enter into ‘open sky’ Air Services Agreements on a reciprocal basis with SAARC (South Asian Association of Regional Cooperation) countries and with countries located entirely beyond 5,000 km radius from New Delhi.

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