Civil Aviation Minister releases Revised Draft National Civil Aviation Policy (NCAP 2015)
Minister of Civil Aviation Shri P. Ashok Gajapathi Raju released
the Revised Draft National Civil Aviation Policy
(NCAP 2015) in New Delhi today. Speaking on the occasion Shri Raju urged all
stakeholders to participate in the process of firming up the policy by giving
their valuable suggestions to the Ministry. He said that the Civil Aviation
Policy should be a dynamic one which can keep pace with the ever changing
demands of the sector.
Minister
of State for Civil Aviation and MoS (I/C) Tourism and Culture Dr Mahesh Sharma
was also present at the function. Dr. Sharma underscored the importance of
bringing air travel within reach of the common man and facilitating regional
air connectivity within the country.
Secretary
Civil Aviation Shri Rajiv Nayan Choubey gave a presentation highlighting the
salient features of the draft policy, which are as follows :
Aim of
the Policy
Ø To
provide a conducive environment and a level playing field to various aviation
sub-sectors, i.e Airlines, Airports, Cargo, Maintenance Repairs and Overhaul
services, General Aviation, Aerospace manufacturing, Skill Development, etc
Ø To
create an eco-system to enable 30 crore domestic ticketing by 2022 and 50 crore
by 2027. Similarly, international ticketing to increase to 20 crore by 2027.
Draft Policy covers:-
1. Regional
Connectivity Scheme (RCS)
Ø
Scheme
will come into effect from 1 April 2016
Ø
Airfare
about Rs 2500 for a one-hour flight in RCS
Ø
This
will be implemented by way of:
ü
Revival
of un-served or under-served airstrips.
§
Only
75 out of 476 airstrips/airports have scheduled operations. Revival of these
depending on demand.
§
Build
‘no-frills’ airports at a cost of Rs 50 crores.
ü Viability Gap
Funding (VGF) for scheduled commuter airlines.
§
VGF
indexed to ATF prices and inflation.
§
VGF
to be shared between Centre and State at 80:20.
§
Creation
of Regional Connectivity Fund (RCF) for VGF.
§
Levy
of 2% on all domestic and international tickets on all routes, other than CAT
IIA and RCS.
ü
Concessions
by different stakeholders:
·
State
Government-
o
Provide
free land and multimodal hinterland connectivity.
o
Concessional
rates of power, water and other utilities.
o
VAT
on ATF 1% or less in RCS airports.
·
Central
Govt-
o
Service
Tax on tickets under RCS will be exempted.
o
ATF
drawn by SCA’s from RCS airports exempt from excise duty.
o
SCA’s
to be treated at par with SOPs for customs duty.
ü
Cost-effective
security solutions by BCAS and state government.
2. Scheduled
Commuter Airlines (SCA)
Ø Eligibility
criteria in terms of paid-up capital to be kept at Rs 2 crore.
Ø Aircraft with
capacity of 100 seats or less.
Ø No
restrictions on number of aircrafts.
Ø Minimum
movements per week to RCS destinations as prescribed.
Ø SCA can enter
into code share with other airlines
Ø Will be
allowed self- handling.
Ø No airport
charges on SCA for their operations under RCS. Rationalise in other non- RCS
airports
3. Maintenance,
Repair and Overhaul (MRO)
Ø
Develop
India as an MRO hub in Asia.
Ø
Service Tax on output services of MRO will be zero-rated.
Ø
Aircraft
maintenance tools and tool-kits will be exempt from Customs Duty.
Ø Tax-
free storage period of spare parts imported by MRO’s extended for 3 years.
Ø To allow
import of unserviceable parts by MROs by providing advance exchange.
Ø Procedures
for custom clearance to be simplified.
Ø Clearance of
the parts by allowing for self -attestation by the MROs.
Ø Foreign
aircraft brought to India for MRO work will be allowed to stay for 6 months.
Beyond this, with DGCA permission .
Ø
Persuade
State Govt to make VAT zero-rated
Ø
Airport
royalty and additional levies to be rationalised in consultations with Airport
Operators.
4. Fiscal
incentives
Ø MRO,
ground handling, cargo and ATF infrastructure co-located at an airport will
also get the benefit of ‘infrastructure’ sector, with benefits under Section
80-IA of Income Tax Act.
5. Rule
5/20
Ø The
government invites suggestions on three possible policy options:
5/20 Rule may continue as it is,
OR
5/20 Rule will be abolished with immediate effect,
OR
ü Domestic airlines
will need to accumulate 300 DFC before commencing flights to SAARC countries
and countries beyond 5000 km radius from New Delhi.
ü They will
need to accumulate 600 DFC before starting flights to the remaining parts of
the world.
ü The
DFC earned will be equal to the Available Seat Kilometer (ASKM) deployed by the
airline on domestic routes divided by 1 crore.
ü All
domestic airlines will required to earn at least 300 DFC per annum in order to
maintain their international flying rights.
ü Free
to re-deploy their excess capacity (above 300) between domestic and foreign
operations and also trade them.
6. Bilateral
Traffic Rights
Ø Liberalise
regime of bilateral rights.
Ø Open
sky on reciprocal basis with SAARC countries and countries beyond a 5000 km
radius from New Delhi.
Ø For
countries within 5,000 kms where domestic airlines have not fully utilised
their quota, additional seats above existing rights would be allotted by bidding
for a three year period, proceeds of which will go to RCF.
Ø Open
skies for countries within 5000 kms will be considered with effect from 1 April
2020.
Ø Increase
in FDI in airlines from 49% to above 50% if the government decides to go in for
open skies
7. Code
Share
Ø
Indian carriers will be free to enter into
code-share agreements with foreign carriers for any destination within India on
a reciprocal basis.
Ø
International code share between Indian and
foreign carriers will be completely liberalised, subject to ASA between India
and the country.
Ø
No prior approvals from MoCA will be required.
Indian carriers need to simply inform MoCA 30 days prior to starting the
code-share flights.
Ø
A review will be carried out after 5 years to
consider the requirement of further liberalisation in code-share agreements and
to drop the requirement of reciprocity.
8. Route
Dispersal Guidelines (RDG)
Ø Category
I will be rationalized by adding more routes based on transparent criteria,
i.e., flying distance of more than 700 km, average seat factor of 70% and
annual traffic of 5 lakh passengers.
Ø The
percentage of Cat. I traffic to be deployed on Cat. II, IIA and III will remain
the same.
Ø Revised
categorization will apply 12 months after date of notification.
Ø Review
of routes under different categories will be done by MoCA once every 5 years.
Ø Airlines
may change routes in Cat II and III with a 30 days prior intimation to MoCA and
DGCA.
Ø Prior
permission of MoCA required for withdrawal of existing operations to and within
N.E region, Islands and Ladakh.
9. Airports
Ø MoCA
will continue to encourage development of airports by the State Government or
the private sector or in PPP mode.
Ø MoCA
will endeavour to provide regulatory certainty.
Ø The
capital expenditure of all future greenfield and brownfield airport projects
promoted by AAI in PPP mode will be monitored closely by AAI.
Ø Tariff
at all future airports will be calculated on a ‘hybrid till’ basis.
Ø MoCA
will explore ways to unlock the potential land use by liberalising the end-use
restrictions for existing (excluding PPP) and future airports of AAI and future
airport projects under PPP.
10. Airport
Authority of India
Ø AAI
will continue to modernize airports and upgrade quality of services.
Ø AAI
will maintain an ASQ rating of 4.5 or more across all airports with throughput
above 1.5 mppa and ASQ rating of 4.0 or more for the rest.
Ø AAI
may be suitably compensated in case a new greenfield airport is approved in
future within a 150 km radius of an existing operational AAI airport (not
applicable to civil enclaves). Alternatively, give option to have the right of
first refusal or equity participation upto 49% in the new airport at its
discretion.
Ø AAI
will continue to provide necessary financial support and facilitate
technological upgradation of ANS to keep pace with the global best practices.
11. Ground
handling
Ø There
will be at least three Ground Handling Agencies (GHA) including Air India’s
subsidiary/JV at an airport.
Ø Domestic
airlines and charter operators will be free to carry out self-handling
themselves or through their subsidiaries or to outsource the same to other
airlines or to a GHA.
Ø Ground
handling staff will have to be on the rolls of the airlines or their
subsidiaries or the GHA. Domestic airlines (including subsidiaries) and GHAs
will be permitted to take contract employees on their rolls. Such employment
contracts will be for a period of at least one year.
12. Aviation
Security
Ø MoCA
will develop ‘service delivery modules’ for aviation security, Immigration,
Customs, quarantine officers etc in consultations with respective
Ministries/Departments.
Ø The
Government will encourage use of private security agencies at airports for non-
core security functions which will be decided in consultation with MHA.
Ø Private
security agencies will comprise retired personnel from military and
para-military forces. BCAS will provide scope of work and norms.
Ø Security
auditors of BCAS will carry out regular and surprise audits with the power to
penalize and blacklist the errant agencies
13. Helicopters
Ø Government
will support growth of helicopters for remote area connectivity, intra-city
movement, tourism, law enforcement, disaster relief, medical evacuation, etc.
Ø Separate
regulations for helicopters will be notified by DGCA by 1 April 2016, after due
stakeholder consultation.
Ø The
government will facilitate the development of four heli-hubs initially.
Ø Helicopters
will be free to fly from point to point without prior ATC clearance in airspace
below 5000 feet and outside ATC control areas and areas other than prohibited
and restricted ones, after filing the flight plan with the nearest ATC office.
14. Cargo
Ø The
Air Cargo Logistics Promotion Board (ACLPB) will submit a detailed action plan
with the objective of reducing dwell time of air cargo from ‘aircraft to truck’
which should also ensure shift to paperless processing.
Ø ACLPB
will develop ‘service delivery modules’ for all elements of air cargo value
chain.
Ø Advanced
Cargo Information system to be implemented by 1 April 2016.
Ø ACLPB
to propose specific action steps to promote transhipment.
Ø ACLPB
will work with AERA and AAI to ensure are competitive vis-à-vis competing
aviation hubs.
Ø ACLPB
will lay down norms for time slots and parking for freighter aircraft.
Ø Optimum
use of 24x7 Customs operations to spread out cargo handling.
Ø AAI
to provide space on10 year lease for express cargo and freighters.
15. Aeronautical
‘Make in India’
Ø MoCA
will be nodal agency for developing commercial aero-related manufacturing and
its eco-system in India.
Ø MoCA
and MoD will work together to ensure that commercial aero-manufacturing is
covered under defence offsets requirements.
Ø Area
where aero-manufacturing takes place will be notified as SEZ.
16. Other
policy reforms
•
Greater de-regulation, transparency and
e-governance
•
Aviation education and skill building
•
Promotion of sustainable aviation practices
Streamlining
Charter Operations
