The cabinet cleared a long awaited new civil aviation policy that seeks rules for airlines to fly overseas and radically increase regional air connectivity. With the policy, the government plans to create an ecosystem that will lead to an increase in air travel. It hopes to see sale of 30 crore air tickets per year in the domestic sector by 2022 and 50 crore by 2027 whereas for international travel, the target is 20 crore by 2027.
The policy also proposes a regional connectivity scheme by offering sops to airlines. Incentives may be offered to airlines to fly on regional routes. The government has proposed a Rs. 2,500 cap for an hour's flight on such routes to ensure affordability and a cap of Rs 1200 airfare for 30 minutes flight. But the new policy says the centre will refund 80 per cent of the losses incurred by airlines due to such caps. The draft policy proposes a 2 per cent cess in domestic and international tickets for the regional connectivity fund to be set up.
In a major development, 5/20 ruled will be replaced by 0/20 rule which implies that airlines will be allowed to fly abroad only if they have 20 aircraft, but there would be no restriction on the number of years of operation. Earlier, airlines had to wait for 5 years at least to have international flying permit under the ‘5/20’ norm.The policy has gone through several rounds of inter-ministerial discussions over the last 18 months and has been finalised after nearly eight months since the ministry came out with the revised draft in October 2015 and follows many rounds of deliberations with stakeholders.
