Air Transport in India
- ONGOING EFFORT I.E. CIVIL AVIATION POLICY 2016-10-27
- SOLUTIONS/ SUGGESTIONS
India the GOLDEN BIRD is flying high to prove its worth globally in the aviation sector as well, just like its booming services/IT sector. This sector has tremendous potential for growth in India and can play a significant role in boosting economic growth. Realising its importance GOI has come up with Civil Aviation Policy 2016 which is an integrated approach to make this means of transport as “TRANSPORT OF THE MASSES.”
To understand the need for a comprehensive Civil Aviation policy we need to look at the problems which surround this sector:
- REGIONAL CONNECTIVITY: Even after introduction of regional connectivity scheme by GOI in 2007 as less as only two carriers enrolled in this scheme. This scheme incentivised regional flying with minimalistic condition of just one carrier get to become an approved carrier still it could not got attention. Private carriers don’t see any profits in far fetched remote regions with near to nil traffic so they avoid indulging.
- LACK OF EASE OF DOING BUSINESS: In India, to step into aviation industry takes a month just to initial approvals and finally making your jet fly is a Herculean task with a lot of bureaucratic hurdles midway.
- INFRASTRUCTURE AND SAFETY: Infrastructure at Indian airports and follow up on SOP’s (standard operating procedures) is not up to the mark which pushes aviation sector in India down the lane.
- HIGH TAXATION: Major travelling cost in India includes tax on ATF (Air turbine fuel) which is approx 50% of the cost service tax, VAT etc. further aggravate the situation.
- SHALLOW PENETRATION OF AIR NETWORK: Since our airways have not reached majority of people, air travel still remains an elite facility in India.
- MRO FACILITIES: Even Indian planes go to Singapore or Saudi Arabia for (maintenance, repair and overhaul) MRO, since overhauling requires expertise and perfection which we haven’t achieved.
This picture is changeable and strong initial steps have been taken through formulation of CIVIL AVIATION POLICY 2016
Sneak Peak into the features of Civil Aviation Policy 2016
- REGIONAL CONNECTIVITY SCHEME: It focuses on airfare of Rs2500 per passenger for one hour flight which will be accomplished through revival of air steps/ airports, viability gap finding to airline operators only in those states which reduce VAT on ATF to 1% or less, reduced service tax and excise duty and creation of regional connectivity fund for VGF.
- ROUTE DISPERSAL GUIDELINES (RDG): Rationalisation of category 1 flights based on transparent criteria i.e. flying distance of more than 700km, average seat factor of 70% and above and annual traffic of 5 lakh passengers shift of a% of cat1 to cat 2 and 2 A.
- 5/20 REQUIREMENT: Replaced with a scheme in which airlines can commence international operations provided that they deploy 20 aircrafts or 20% of total capacity, whichever is higher for domestic operations.
- BILATERAL TRAFFIC RIGHTS: GOI will enter into ‘OPEN SKY’ agreements on reciprocal basis with SAARC countries and countries located beyond 5000km from Delhi.
- GROUND HANDLING POLICY: It will be replaced by a new and efficient framework by appointment of 3 ground handling agencies including Air India’s subsidiary at all major airports. Airport operator will decide number of GHA at all non-major airports.
- AVIATION SECURITY, IMMIGRATION AND CUSTOMS: MOCA will develop service delivery modules for aviation security, immigration and customs in consultation with respective Ministries and Departments. Private security agencies will be encouraged for provision of non-core security functions. Security architecture as different airports would be proportionate to the threat classification and traffic volume.
- MRO: MOCA will persuade state government to make VAT zero rated on MRO activities. Efforts are being made to turn India into an MRO hub.
- AVIATION EDUCATION AND SKILL BUILDING: Efforts will be made to provide employable skills and meet challenging demands of this industry through raising standards of training.
Success of this policy lies in its implementation and various loopholes that are needed to be plugged to make this policy a sure shot success are:
- VGF through imposition of civil aviation cess will contradict the reduction given in prices and will come up to be a negative point.
- Consultation with developed countries on MRO skills can create a whole new area for jobs and development in India.
- Local operators can be brought into the mainstream and can be converted into scheduled carriers in a phased manner which would put responsibility on them and trigger them to perform well.
- There is a dire need for strengthening aviation industry institutions such as AAI (Airport Authority of India) and involvement of all stakeholders including GOI, customers, AAI to satisfy the consumers.
- Only if aviation sector is graft face and transparent then only we can expect it to perform miracles for flying sector.
- Since GOI is focussed towards Ease of doing business it should come up with a “minimum time policy” to attract operators.
Until this sector reaches the masses and does not become accessible, affordable, safe and secure India’s dream to rule the aviation industry can not be fulfilled. If each block of the consumer centric Civil Aviation Policy 2016 fits into the right place full potential of the Indian aviation sector can be reaped.