The Andhra Pradesh Civil Aviation Policy, which was recently approved by the N. Chandrababu Naidu Cabinet, provides for creation of a regional airport development fund and project-specific special purpose vehicles.

The airport policy seeks to improve air connectivity with the State, promote civil aviation infrastructure and transform AP as a preferred destination for investment in aviation and allied businesses by creating airports as hubs of economic activity, according to an order released today detailing the provisions of the policy.

The policy also provides for underwriting specific number of airline seats or certain percentage of the capacity as assessed by the Government to encourage more flights.

After the bifurcation of Andhra Pradesh, it now seeks to provide a reliable and seamless air connectivity linking to industrial and tourism hubs and some major cities.

Currently, the share of airports in AP in the passenger traffic is about 1 per cent (AP attracted 1.6 million passengers in AP airports in 2014-15) and it is targeted to take it up to 7 per cent by 2022. The share of air cargo is also proposed to be increased from 0.1 pr cent now to 5 per cent by 2022.

While the State now has only one international airport, Visakhapatnam, the State plans to set up four modern international airports by 2022.

To expedite project related approvals and land for airports, the policy has provision to create special purpose vehicles for speedy and smooth development of airports and other aviation infrastructure projects.

Under the policy, it is proposed to set up AP regional airport development fund to provide financial support for regional airports with an initial corpus of Rs 100 crore, and backed by budgetary support.

The policy also provides for a number of fiscal incentives, exemptions and re-imbursements of various charges to encourage investments.

Aerospace & Defence

As a part of the policy, a related focus area is the development of Aerospae and Defence manufacturing facilities fitting well into the Country’s drive of “Make in India.”

The aviation sector too like other infrastructure sector aims to develop projects on the public-private partnership (PPP) mode.

The policy is proposed to be reviewed after five years for suitable modifications as necessitated by the changing environment after consultation of various stakeholders.

The Government has planned six Greenfield airports at Bhogapuram, Dagadarthi, Orvakallu, Kuppam, Tadepallgudem and Ongole with Bhogapuram in Vizianagram proposed to be international airport.

It is proposed to use the airstrip s at Dinakonda in Prakasham district, Nagarjunasagar in Guntur district and Tadepalligudem in West Godavari district.

The sector would enjoy lower VAT on aviation turbine fuel, stamp duty exemption, re-imbursement of property tax for Aircraft MRO (maintenance, repair and overhaul) facility.

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