-
Aviation policy cleared: 5/20 likely eased, capped fares mooted
The government today approved its long-awaited National Aviation Policy, which contains various measures to boost the country’s under-penetrated aviation sector and boost connectivity across towns. The details of the policy are not yet known but sources have told CNBC-TV18 the government has tweaked the 5/20 rule, which requires a carrier to be in operation for five years and have fleet of 20 aircraft before it is allowed to fly to international destinations. Under the tweaked rule, sources say the government has now stipulated airlines to have at least 20 aircraft but done with the five-year requirement. This would come as good news to recent entrants AirAsia India and Vistara, who will though still be required to scale up their fleet size to be able to fly abroad. In a bid to improve regional connectivity, the government has likely capped airfares for flights with less than one hour duration at Rs 2,500 per passenger and those under 30 minutes at Rs 1,200 for routes under the regional connectivity scheme (RCS). In the draft aviation policy released last year, the government had suggested some sort of subsidy should carriers incur losses at such fares but details of this are not yet known. Experts said the move would help improve regional connectivity between tier II and III cities and could boost demand by 15-20 percent. The policy has also likely taken a number of steps to boost aircraft maintenance, repair and overhaul (MRO) activity in India, a Rs 5,000 crore market for Indian carriers, which is 90 percent served by India’s neighbouring countries. Civil Aviation Minister Ashok Gajapati Raju will hold a press conference at 4 pm outlining details of the policy. Jerome Baker Jersey
Share This
