Norms eased for start-up airlines; one-hour flights to cost Rs. 2,500.
In a big push to its reform agenda, the National Democratic Alliance (NDA) government approved the country’s first National Civil Aviation Policy for increasing air connectivity, allowing new domestic airlines to fly abroad quickly and opening up the skies for European and South Asian Association for Regional Cooperation (SAARC) countries.
New airlines, such as Vistara and AirAsia, will no longer have to wait for five years before starting operations on international routes. Start-up airlines can now fly abroad after operating at least 20 planes or 20 per cent of their total flying capacity, whichever is higher, on domestic routes.
According to a 2004 norm, which is also known as the ‘5/20 rule’, a domestic airline is allowed to go international only after flying for five years to domestic destinations and operating at least 20 aircraft.
“Connecting the unconnected and serving the un-served is the motto of the civil aviation policy. The questionable legacy of the ‘5/20 rule’ has been thrown into the dustbin today,” Information Technology and Communications Minister Ravi Shankar Prasad said here after the Cabinet meeting.
India will have an open-sky policy for countries beyond the 5,000-km radius from Delhi on a reciprocal basis. This means that airlines from European or Saarc countries will have unlimited access, in terms of number of flights and seats, to Indian airports, leading to increased flight frequencies with these countries.
While India has full open-sky with U.S., it has a near open-sky agreement with the U.K. with a restriction on the frequency of flights to and from Mumbai and Delhi.
As a part of its regional connectivity scheme, passengers will be charged Rs. 2,500 for an hour’s flight on regional routes by the airlines. The government will provide financial support to fund airlines’ losses on such un-served routes.
Government opens up skies for more flights
This will be done through “a small levy per departure” on all domestic routes except in remote and north-eastern States. The government has grand plans to revive 50 airports in the next two years through the regional connectivity scheme. However, it is yet to ascertain how it will mop up funds for providing the viability gap funding.
“We have attempted to create an eco-system where an ordinary Indian can start flying. India has 35 crore middle-class citizens but the number of tickets sold is only eight crore. It’s a pity that middle-class Indians with reasonable amount of disposable income are not able to fly once in four years,” Civil Aviation Secretary R.N. Choubey told The Hindu in an interview. The government expects the number of tickets sold to go up to 30 crore by 2022, Mr. Choubey added.
He said the ceiling on airfares will be proportionate to the flying hour. For instance, airlines will charge passengers around Rs. 1,200 for a 30-minute flight and around Rs. 1,800 for a 45-minute journey.
Domestic airlines will be required to provide more flights to the north-eastern region, Jammu and Kashmir, Andaman and Nicobar Islands and Lakshadweep as the route dispersal guidelines have been amended to add six more sectors to the metro routes. As per the guidelines, on such north-eastern and other routes, airlines are mandated to fly 10 per cent of their total capacity they deploy on metro routes.
As per its earlier proposal, the government doesn’t plan to auction the international air traffic rights. A committee, headed by the Cabinet Secretary, will however recommend a method to allocate additional capacity entitlements to other countries wherever the Indian carriers have not utilised 80 per cent of their bilateral air traffic rights.
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