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Civil aviation policy to get delayed again as industry awaits consensus

Cabinet nod needed on several issues; likely only in March

Roudra Bhattacharya  |  New Delhi 

A policy will likely be delayed for the third time in recent months, to around mid-March, Business Standard has learnt from official sources. The aviation ministry is yet to complete consultations on the subject.

And, before any official declaration, it would need Cabinet approval on issues such as the proposed listing on stock exchanges of the of India and making a new corporate entity.

At this point, various stakeholders such as airlines have not even arrived at a consensus on key issues such as removal or dilution of the contentious 5/20 rule (that an airline must have at least 20 aircraft and have plied in India for five years before being allowed to ply abroad), a senior aviation ministry official told Business Standard.

Other areas of deliberation include the new (RDGs) and a proposal to create six airports as metro hubs. “We are looking to complete our draft by end-February, so that we can send the policy for Cabinet approval in March,” a ministry official said.

The first half of Parliament’s Budget session is between February 23 and March 20. The second half is between April 20 and May 8. When the draft policy was issued for consultations on November 10 last year, the ministry had given a target date of end-January for notification. That was later changed to mid-February. Last week (January 28), all airline representatives had met secretary V Somasundaran for discussion on the 5/20 rule and RDGs.

Incumbents such as IndiGo and GoAir are in favour of retaining it; new entrants and want it removed. A ministry official said the government was likely to dilute 5/20 rule to 1/5 (one year of operations and five aircraft) and combine it with the new RDGs. These aim to offer airlines credit for flights abroad on the basis of regional and remote air connections offered by them.

The new policy also aims to address other issues. One is to remove the non-scheduled operator permit classification, leading 120 air charter companies to start offering commercial services, with smaller aircraft. Separately, it also hopes to address issues like high taxes on maintenance, repair and overhaul services, and on jet fuel.

First Published: Fri, February 06 2015. 00:14 IST