Ministry of Civil Aviation released Revised Draft National Civil Aviation Policy

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Who: Ministry of Civil Aviation
What: Released Revised Draft National Civil Aviation Policy
When: 30 October 2015

The Ministry of Civil Aviation on 30 October 2015 released Revised Draft National Civil Aviation Policy (NCAP 2015).

The policy aims at providing a favourable environment and a level playing field to various aviation sub-sectors, such as Airlines, Airports, Cargo, Maintenance Repairs and Overhaul (MRO) services and so on.

Besides, the scheme also intends to create an eco-system to enable 30 crore domestic ticketing by 2022 and 50 crore by 2027.

Highlights of the NCAP

Under the Regional Connectivity Scheme (RCS), airlines will not be allowed to charge more than 2500 rupees for one hour flight between two small cities. The RCS will become effective from 1 April 2016.

Indian carriers will be free to enter into code-share agreements with foreign carriers for any destination within India on a reciprocal basis. Indian carriers need to simply inform Ministry of Civil Aviation (MoCA) 30 days prior to starting the code-share flights.

The Government will encourage use of private security agencies at airports for non-core security functions. The private security agencies will comprise retired personnel from military and para-military forces.

Proposes building no-frills airports at a cost of 50 crores rupees.

Proposes Viability Gap Funding (VGF) for scheduled commuter airlines indexed to ATF prices and inflation and it will be shared between Centre and State at 80:20.

Proposes creation of Regional Connectivity Fund (RCF) for VGF which will be created by levy of 2% on all domestic and international tickets on all routes, other than CAT IIA and RCS.

Under Scheduled Commuter Airlines (SCA), eligibility criteria in terms of paid-up capital will be kept at 2 crore rupees.

Service-tax on output services of Maintenance, Repair and Overhaul (MRO) facility will be zero-rated so as to develop India as an MRO hub in Asia.

The government invited suggestions before taking a final call on 5/20 Rule, which only allows local airlines to fly overseas when they have five years operational experience and at least a fleet of 20 aircraft.

Under Bilateral Traffic Rights, open skies for countries within 5000 kilometres will be considered with effect from 1 April 2020.

Foreign Direct Investment (FDI) in domestic airlines will be hiked to over 50 percent in open skies policy, which is currently 49 percent.

Airport Authority of India (AAI) will continue to modernize airports and upgrade quality of services.

There will be at least three Ground Handling Agencies (GHA) including Air India’s subsidiary/JV at an airport.

Advanced Cargo Information system will be implemented by 1 April 2016.

There will be a revival of under-served airstrips and construction of no-frills airports at a cost of 50 crore rupees under RCS.

MoCA will be nodal agency for developing commercial aero-related manufacturing and its eco-system in India in line with Aeronautical Make in India.

Government will support growth of helicopters for remote area connectivity and separate regulations for helicopters will be notified by DGCA by 1 April 2016