Civil Aviation Policy 2016

Motto: Connecting the unconnected and serving the unserved

  • Making India 3rd largest civil aviation market by 2022
  • Increase domestic ticketing to 30 crore by 2022 from 8 crore in 2015
  • Increase airports having scheduled commercial flights from 77 in 2016 to 127 by 2019
  • Increase cargo volumes to 10 million tonnes i.e. by 4 times by 2027
  • Under Regional Connectivity Scheme, enabling Indians to fly at Rs. 2,500 per hour at unserved airports
  • For starting international operations, requirement of 5 years of domestic flying removed
  • Incentives to Maintenance, Repair and Overhaul (MRO) sector in order to develop India as hub for South Asia
  • Ensure availability of quality certified 3.3 lakh skilled personnel by 2025
  • Development of green-field airports and heliports
  • Enhancing ease of doing business through simplified procedures, deregulation and e-governance
  • Promote ‘Make In India’ in Civil Aviation Sector
  • New airlines can also start their international operations with at least 20 planes or 20 per cent of their total flying capacity, on domestic routes, whichever is higher.
  • India will have an open-sky policy for European or Saarc countries. India already has a full open-sky arrangement with the U.S
Analysis of Policy
  • Capping price is being criticized as airlines are loss making and indebted
  • RCS needs more explanation as it lacks clarity – whether fare capping is even for last minute booking, identification of specific routes and associated regional impacts and specific modalities to be adopted in administering this scheme
  • Reduction in state level tax on ATF will reduce overall operational cost
  • Tax sops on developing MRO is welcome step
  • Capping of fare in few sectors will improve connectivity
  • Replacement of 5/20 with 0/20 is not going to help to benefit new players because they can not scale up immediately to be eligible to fly international
  • The benefits of subsidising the airfare may not necessarily accrue to the target middle-class, also highlighted by the Economic Survey 2015-16.
  • Experts say linking fare to some cost elements of airlines, like the ATF (aviation turbine fuel) prices would have served better.
  • The small cess per departure on some domestic routes may not be sufficient to augment the viability fund gap if the crude oil prices rise in the future.
  • Many ifs and buts make the policy difficult to implement.
  • Transformation of Airport Authority of India (AAI) : Transforming AAI is another area which NCAP did not address. Many experts feel that AAI should be listed on stock exchange. Also, it was expected that the policy would separate the Air Navigation Services (ANS) from AAI and make it an independent body. NCAP is silent on these aspects.
  • ATF still the same : NCAP does not deal with removing negative tax regime in the aviation sector, the most prominent being the service tax on aviation turbine fuel (ATF)



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