National Civil Aviation Policy 2016 approved by Union Cabinet

The Union Cabinet approved the Civil Aviation Policy, 2016 (“Policy”) on 15th June 2016 which focuses on improving regional connectivity, establishing an integrated eco system which will lead to significant growth of the civil aviation sector in order to promote tourism, employment and balanced growth through fiscal support and infrastructure development. The salient features the Policy are detailed as under:

  1. 5/20 rule is now replaced with 0/20 therefore a new airline regardless of how long it has been in operation can now go international once it has a fleet of 20 aircraft’s.
  2. Regional Connectivity Scheme which becomes effective from second quarter of 2016-17  caps the ticket rates of short-span flights for journeys with one-hour air time to Rs 2,500/-(Rupees Two Thousand Five Hundred), brings down VAT on Aviation Turbine Fuel to 1%, and provides for viability gap funding to help cut ticket cost, Air Transport Services to under-served and un-served markets with potential, provides connectivity both within a Region as well as between Regions, no airport charges, free police and fire services and power, water and other utilities at concessional rates etc.
  3. Separate regulations for helicopters to be notified by Directorate General of Civil Aviation. Helicopters will be free to fly from point to point without prior Air Traffic Control clearance in airspace below 5000 feet and areas other than controlled or prohibited or restricted airspace.
  4. Government of India will enter into ‘Open Sky’ Air Services Agreement on a reciprocal basis with South Asian Association for Regional Cooperation countries and countries located beyond 5000 km from Delhi.
  5. Adequate provisions for land for MRO service providers will be made in all future airport/heliport projects where potential for such MRO services exists. Airport royalty and additional charges not to be levied on MRO service providers for a period of 5 years from the date of approval of the policy.
  6. Ministry of Civil Aviation to develop ‘service delivery modules’ for aviation security, Immigration, Customs; quarantine officers etc in consultations with respective Ministries/Departments.
  7. Ministry of Civil Aviation to develop a scheme with budgetary support for Type rating of Pilots.
  8. The Ground Handling Policy/ Instructions/Regulations to be replaced by a new framework.
  9.  Future tariffs at all airports to be calculated on a ‘hybrid till’ basis, unless specified otherwise in concession agreements.
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