New Aviation Policy – How Does It Stack Up?



According to Ashok Gajapati Raju, the Aviation Minister of India, the new policy for civil aviation in India is going to come out by the end of 2015. The Indian Government has recently come out with a draft version of the same and as part of this draft, several changes to the sector have been proposed. A cess of 2% is supposed to be levied on flight fares and regional fares are supposed to be brought under a definite limit as well. According to the aviation minister, there have been detailed discussions with Narendra Modi. This happened before the draft policy came into being.

He has also revealed that talks have happened at various levels. This has been done with the view to do away with the various obstructions to the said policy. Raju has further said that the emphasis of the new policy has been on finding ways to solve the various problems that plague the sector at present. Incidentally, the new aviation policy has been in the offing for a long period of time.

The 5/20 rule

This is one of the most keenly-awaited aspects of the new aviation policy of the Indian Government. At present there are two options before the government – it can either retain it or do away with the same. According to the rule, an Indian airline needs to play its trade in the domestic routes for five years and also possess a fleet of 20 aircraft before it can be given the permission to fly outside India as well. Incidentally, Raju himself is against the rule since he considers it to be a step that holds back Indian airlines from achieving their true potential.

Reaction of industry

From the look of it, the new civil aviation policy has not exactly caught on fully with the Indian companies. The President of Business Aircraft Operators Association (BAOA), Jayant Nadkarni, has said the new draft aviation policy is a welcome step in ensuring the industry’s growth. However, he says that it has failed to take into cognizance the interests of general and business aviation in the country. This is an important statement considering the fact that these are critical components of India’s aviation industry. Nadkarni has found loopholes in the network of commuter airlines that the government has set up for increasing connectivity to the far-flung locations in the country. He has said that these have to be addressed and on an urgent basis.

Preference for inbound foreign charters

Nadkarni has also said that at the moment the Draft Nationa Civil Aviation Policy is only catering to the inbound foreign charters and not giving sufficient importance to the domestic ones. The policy has also skipped the vexing issue of taxation for importing the smaller planes, which the President of Business Aircraft Operators Association has found to be lacking in rationality. He has termed it exorbitant as well. Nadkarni has further stated that this is one area that is pulling back the growth of the Indian aviation sector as a whole.


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