Draft Aviation Policy: 10 important takeaways

Zee Media Bureau

New Delhi: The Civil Aviation Ministry has unveiled the much-awaited draft civil aviation policy, seeking to make air travel affordable, taking air-travel to the masses and promoting regional connectivity.

Here are ten important takeaways from the policy.

Also read: Draft civil aviation policy elicits mixed response

1. Fare would be capped at Rs 2,500 for one-hour flight under regional connectivity scheme for places that are unserved currently.

2. The Ministry has also pitched for over 50 percent FDI in domestic carriers in case open skies policy is implemented.

3. The policy calls for levy of 2 percent cess on all domestic and international tickets on all routes other than Cat IIA and RCS, while proposing to put service tax at zero to promote Maintenance, Repair and Overhaul facility.

Also read: Air travel to cost more as govt moots 2% levy on tickets

4. The Ministry has sought comments on three options -- abolish the 5/20 norm completely, continue with it, or link the overseas flying rights with domestic flying credits.

5. To make MRO (Maintenance Repair, Overhaul) cheaper, the government has proposed to exempt such activities from service tax net and not levy any VAT. The policy also envisages making India an Asia hub for MRO business.

6. To boost regional connectivity, the policy has proposed various concessions such as state governments providing free land and lowering the valued added tax (VAT) on ATF to 1 per cent or less.

7. There would be no service tax on tickets under the Regional Connectivity Scheme (RCS), apart from service tax exemption for scheduled commuter airlines taking jet fuel from RCS airports.

8. The revised policy has floated the concept of Scheduled Commuter Airlines (SCAs) which would have relaxed norms and those entities would not be liable to pay airport charges for operations under RCS.

9. Helicopters will be free to fly from point to point without prior ATC clearance in airspace below 5,000 feet and outside ATC control areas and those other than prohibited and restricted ones after filing the flight plan with the nearest ATC office

10. The boarder aim of the draft policy is to create an ecosystem for 30 crore domestic ticketing by 2022 and 50 crore by 2027 besides targeting international ticketing at 20 crore.

With Agency Inputs