National Civil Aviation Policy, 2016

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On June 15, 2016, the Ministry of Civil Aviation issued the National Civil Aviation Policy (‘Policy’), focusing on affordable air travel, improving connectivity, boosting tourism, infrastructure, sustainable development and job creation in tier-II and tier-III cities and tax/economic sops. The Policy covers 22 facets of Indian civil aviation including maintenance, repair and overhaul operations, ground-handling, security and customs. ‘Regional Connectivity’, being a key focus-area, the Policy encourages the development of regional airports and airstrips, provides incentives to airline operators to fly to less connected sectors and provides for a cross-subsidy between popular routes and regional routes.

Additionally, the erstwhile ‘5/20 Rule’ which provided that an Indian airline could operate on international routes only if it had previously operated for a period of five years on domestic routes and had a fleet of at least 20 aircraft, has been liberalised by permitting all airlines to commence international operations, provided that they deploy at least 20 aircraft or 20% of total capacity, whichever is higher, for domestic operations.

Other significant changes include the implementation of ‘open sky agreements’ (permitting Indian operators to launch both passenger and cargo flights to and from a range of countries), development of greenfield and brownfield airports by the private sector, State governments and/or by a public-private-partnership, promotion of air cargo services to further the ‘Make in India’, e-commerce and export policies of the Government.

Published In:Inter Alia - Quarterly Edition - July 2016 [ English Chinese japanese ]
Date: July 1, 2016