New Delhi: A long-awaited new civil aviation policy that eases rules for airlines to fly overseas and seeks to increase regional air connectivity and encourage more people to fly has been cleared by the cabinet. “The Civil Aviation Policy approved today by the Cabinet will transform the sector and greatly benefit passengers,” Prime Minister Narendra Modi tweeted.
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- The policy caps fare at Rs. 2,500 for one-hour flights between smaller towns and cities as the government plans an ecosystem that will lead to an increase in air travel by making it affordable.
- It aims at increasing connectivity to the country’s smaller towns and cities by offering sops and incentives to airlines to fly on these routes.
- The new policy says the Centre will refund 80 per cent of the losses incurred by airlines due to the cap in fare on such routes.
- The government hopes to see the sale of 30 crore air tickets per year in the domestic sector by 2022 and 50 crore by 2027. For international travel, the target is 20 crore by 2027.
- Airlines will now be charged a cess on domestic routes to pay for subsidized flights.
- According to the new policy, an airline can fly international if it has a fleet of 20 planes. It no more needs to have operated in the domestic sector for five years to fly abroad.
- This will benefit new operators like AirAsia and Air Vistara. AirAsia group chief Tony Fernandes tweeted, “Initial reports on India is superb. Of course I think 20 aircraft is to many but thank you @narendramodi. Big day for indian Avaition (sic).”
- A revival of old air strips as no frill airports, a single window system for all aviation related transactions and complaints by aviation regulator Directorate General of Civil Aviation or DGCA are other important provisions in the new policy. It also proposes real time safety tracking.
- Civil Aviation Minister Ashok Gajapathi Raju said the policy is a “game changer” and added that the country’s aviation sector is poised to become the world’s third largest by 2022. “NDA government clears India’s first ever integrated National Civil Aviation Policy. This will be a game-changer for the sector,” he tweeted.
- Airline stocks – Jet Airways, InterGlobe Aviation and SpiceJet – jumped as much as 5 per cent after the Cabinet cleared the long-awaited policy.