Agency
New Delhi: Airlines will soon charge only Rs 2,500 for one hour flights and will get tax incentives for operating on unserved routes even as fliers will have to pay additional levy towards regional connectivity fund under the civil aviation policy unveiled on Wednesday.
The government has scrapped the controversial 5/20 norm and now any domestic airline can fly overseas provided they deploy 20 planes or 20 per cent of their total capacity for domestic operations.
Amid concerns over an earlier proposal to auction additional bilateral rights, the government has now decided that a final call on additional rights would be taken by a committee headed by the Cabinet Secretary.
Besides, the Civil Aviation Ministry will come out with initiatives to develop new airports, separate regulations for helicopters and measures to boost skill development in the aviation sector.
Airlines will also get tax incentives for operating on unserved routes.
The new policy was approved by the Cabinet on Wednesday and the much talked out regional air connectivity scheme is expected to be operational in the current quarter ending September.
“The aim is to ensure affordable, convenient and cheap flying” for the people, Civil Aviation Secretary R N Choubey said.
There has been a high decibel debate over the continuance of 5/20 norm–whereby only local airlines having at least five years of operational experience and a fleet of minimum 20 aircraft are allowed to fly overseas.
About the decision to scrap the rule, Union minister Ravi Shankar Prasad said, “A questionable legacy has been thrown into the dustbin.”
The 5/20 rule was introduced during the UPA regime.
With regard to charging extra from passengers towards regional connectivity fund, Choubey said, “It will be a very, very small levy”.
The Ministry said the 5/20 norm is being replaced by a “formulation which provides a level playing field and allows airlines, both new and old, to commence international operations provided they continue to meet some obligations for domestic operation”.
In efforts to increase air traffic into the country and ensure improve ease of doing business, the regime of bilateral rights and code share agreements would be liberalised.
“Open skies will be implemented on a reciprocal basis for SAARC countries and countries beyond 5,000 km from Delhi,” the ministry said in a release.
A committee headed by the Cabinet Secretary would decide on allotment of additional capacity entitlements for overseas carriers wherever designated Indian airlines have not utilised 80 per cent of their bilateral rights but the foreign counterparts have utilised their quota and are looking for more.
Seeking to provide a boost for the Maintenance, Repair and Overhaul (MRO) segment, the Ministry would persuade state governments not to levy VAT on such activities.
“Airport royalty and additional charges will not be levied on MRO service providers for a period of five years from the date of approval of the policy,” the release said.
