Pathbreaking policy to transform India's skies

The aviation policy is not only pathbreaking in the sense that it has democratised air travel, making it affordable by capping the one-hour flight fare at Rs 2,500 for middle and lower middle income families, but for the first time since Independence there is actually an aviation policy. Kudos to the Narendra Modi government which hopes that the number of air tickets sold annually will soar to 30 crore by 2022 from the present eight crore. The need for an aviation policy was first mooted 25 years ago, but it was only in 1997, under the then secretary, civil aviation, M.K. Kaw, that a draft policy was prepared.

But, after some  discussion, it drifted. Now there is a genuine effort to develop domestic connectivity with Tier-II and Tier-III towns, which is part of the Modi government’s vision of inclusive growth. It also involves a partnership with the state governments, which are expected to fill the viability gap, and there is enough indication to show that states benefit from the partnership — the ones that reduced taxes on aviation fuel, for instance, have witnessed higher growth in passenger travel. The government has done well in addressing the bilateral rights issue and correcting the imbalance created by the earlier UPA government, which gave a tremendous boost to the three Gulf carriers that dominate Indian skies for international travel at the cost of the Indian carriers.

The cribbing over the tweaking of the controversial 5/20 rule (an airline had to have five years in the domestic sector and a minimum of 20 aircraft in order to fly internationally) can be expected from the older domestic carriers. The new policy requires an airline to have 20 aircraft and 20 per cent domestic deployment. The bilateral policy has also been tweaked to permit open skies to airlines of countries more than 5,000 km from India. This will not only counteract the dominant positions of the Gulf carriers but will give them competition.

This new policy will also bring more investment into the aviation sector as new entrants will have to invest to scale up their fleet to 20 aircraft. Air Asia’s CEO has already said they would do so. Aviation experts feel it will take at least a year for something like domestic connectivity to take off. There will have to be investment in air traffic control towers and positioning of skilled manpower to man them. The policy is also quiet on costs like landing fees, handling fees, navigation fees, parking fees, etc. All these factors make viability an issue.