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HomeLearnEconomyThe Civil Aviation Policy (CAP) 2015

The Civil Aviation Policy (CAP) 2015

With an intention to resurrect and reform the aviation sector to make them fit for meeting the challenges and in using the opportunities in this globalised world, the Central Government had released a draft of the Civil Aviation Policy, 2015.

Background to the Civil Aviation Policy 2015

It has been continuously affirmed during the recent years that India has got the potential to get itself listed among the top three nations in the context of domestic and international passenger traffic. It has been being emphasized by the experts that India has an ideal geographic location between the Easter and Western hemisphere; a 300 million strong middle class and a rapidly growing economy.

However, despite having all these advantage Indian Aviation Sector has not displayed the level of growth it should have. At present India aviation is ranked 10th in the world.

So it has been felt, that there is need, demanding immediate solutions, to encourage and promote the growth Indian aviation sector in a significant way, as the growth of this sector will surely have multiplier effect on Indian Economy.

Vision and Mission of CAP 2015

The Civil Aviation Policy 2015 visions to create an eco-system to empower 30 crore domestic ticketing by 2022 and 50 crore by 2027. In the similar way it has a target of increasing international ticketing to 20 crore by 2027.

It has a mission to cater (to) safe, secure, sustainable and affordable air travel that would have access to various parts of India and the world.

Objectives of the Civil Aviation Policy 2015

The CAP’s objectives are: to assure safe, secure and bearable aviation industry by using the technology and effective monitoring; to promote ease of doing business through e-governance, simplified procedures and deregulation; to promote regional connectivity through financial assistance and infrastructure development; and to enhance entire aviation sector chain that includes cargo, MRO, general aviation, aerospace manufacturing and skill development.

Also Read: India’s Trade Policy

Highlights of the Civil Aviation Policy 2015

The Union Civil Aviation Ministry, keeping all the options open on International flying norms (5/2 rule), stated three options in its draft policy: Continuing the present norms: complete abolition from immediate effect; and a credit base system to replace it.

Hither to, an airline needs five years of operations and 20 aircrafts in the fleet to go on international routes.

The Government has decided not to morsel the route dispersal guidelines that command airlines to fly to remote areas. In addition, however, more routes are going to be added up in the category-1 (metro) routes.

At present, the airlines require to extend at least 10% of the capacity on the metro route in the North-Eastern region, Jammu & Kashmir, Adman & Nicobar Islands and Lakshadweep (category-II routes). The airlines require the permission of the civil aviation Ministry to withdraw existing operations in “North-East region, Islands and Ladakh”.

A regional connectivity scheme that has come into effect on April 1, 2016 is framed in which airfares for a one-hour flight is capped at Rs. 2,500. This is going to become through revival of unserved or under-served airstrips.

Under this scheme, a regional connectivity fund will be made functional by charging 2% cess on air tickets on domestic and international routes except the intra-remote areas. The Union Government is going to provide viability gap funding on air tickets from 80% of the regional connectivity fund and the rest will be shared by the State.

The Civil Aviation Policy 2015, endeavours to make India a Maintenance, Repair and Overhaul (MRO) hub in Asia. On the output services of MRO the service tax will be zero, aircraft maintenance tools are going to be exempted from custom duty, tax free storage period of MRO’s imported spare-parts is going to be extended for three years, and procedures for custom clearance are going to be simplified.

In a major relief, the Civil Aviation Ministry may permit to self handle the services at airports, that included check-in, luggage-handling, aircraft cleaning and servicing, loading and uploading of food and beverages. The airlines would be allowed to hire workers with at least one year of contract to perform the job.

The Union Government is firm on its stand that airports will continue to be developed through Public-Private Partnership (PPP) model. However, it has been suggested that AAI is going to “closely monitor” the capital expenditure of all future airports developed through expenditure of all future airports developed through PPP method. At all future airports tariff is going to be calculated on a “hybrid till” basis.

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