MUMBAI // India has outlined plans to bring “flying to the masses” and become one of the world’s biggest aviation markets.
In its draft national civil aviation policy unveiled on Friday, the Indian government stated that the country has the potential to become one of the top three nations globally in terms of local and international passenger traffic.
“It has an ideal geographic location between the eastern and western hemisphere, a 300 million member middle class and a rapidly growing economy,” the government said. “Despite these advantages, the Indian aviation sector has not witnessed the level of growth it should have, and at present it is ranked 10th in the world.”
To make air travel more affordable to a wider section of the population, it said it was aiming to cap fares on small town routes in India at 2,500 rupees (Dh140) per passenger for a one-hour flight, set to come into effect from the beginning of next April.
The flights would be subsidised by a 2 per cent levy on international and domestic tickets. Other measures mapped out include plans to set up “no frills” airports and revive air strips.
Indian airline chiefs reacted positively to the draft policy.
“It is extremely encouraging to see the commitment and foresight in outlaying a comprehensive view on MRO [maintenance, repair, and overhaul], low-cost carrier airports infrastructure, affordable tariff balancing to boost air travel and encourage sustainable growth of our industry,” said Mittu Chandilya, AirAsia India’s chief executive and managing director, the Press Trust of India reported.
Ajay Singh, SpiceJet’s chairman and managing director, described the policy as “pretty progressive”.
The draft policy also stated that it would liberalise bilateral rights. India would also look at raising the limit for foreign direct investment, currently 49 per cent, to above 50 per cent if it decided to opt for an open-skies agreement with countries within a 5,000-kilometre radius in 2020.
But some in the industry were disappointed that important issues were not resolved in the draft policy.
“It lacks clarity on the government’s position on the 5/20 rule,” according to Crisil Research, a Standard & Poor’s company, referring to the regulation that Indian carriers must have been operating for at least five years and have 20 aircraft before they can start international operations.
There have been widespread calls among carriers for the rule to be scrapped, thereby allow ing India’s aviation industry to expand more rapidly.
“The policy also does not dwell on the long-pending structural issue of high sales tax on aviation turbine fuel, which diminishes the attractiveness of the sector,” said Crisil.
MJ Joseph, the manager of a logistics company in Kolkata, said he flies about twice a month in India, mainly for work, and “would definitely” travel more if fares decreased.
“Some routes in India are very expensive and that is where the common man avoids flying,” he said. “Although the budget airlines have come, still some are very high. The Indian public is very cost-conscious.”
The government is seeking feedback from the public and the industry before it releases the final policy.
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