Many loose ends in draft aviation policy

The draft of civil aviation policy, which was discussed by the Group of Ministers on August 14 and is to come up for discussion again on September 20, commits very little on paper and leaves most of the controversial decisions to the discretion of the civil aviation ministry, ensuring that its power is not diluted in any way.

Industry players and investors who are looking for investing in the sector in India, will be severely disappointed with this draft as it leaves all the questions open and does not set any rules,thereby leaving everything open to change.

For three years now, there have been innumerable references to the civil aviation policy and how it would ameliorate the sector and remove all the problems it. Also, it will do away with ambiguity.

With yields falling and margins getting squeezed, the civil aviation ministry had been considering pushing for raising the bar for entry into the domestic aviation sector. Currently, companies are required to have a minimum equity base of Rs 30 crore and a minimum of 5 aircraft in their fleet. But the policy document does not propose any specific change. It simply says that the Ministry of Civil Aviation (MoCA) will "frame and review guidelines, from time to time, so as to ensure that the airlines, both new and existing, have requisite financial strength in terms of equity and/or reserves".

Similarly, on the highly controversial issue of allowing domestic carriers to fly overseas before their completing five years of domestic operations, the document does not mention anything.

It points out that in order to enhance the international connectivity, scheduled Indian carriers with a proven track record have been permitted to operate on international routes. On the commencement of international operations, the carriers are not permitted to reduce their operations in the domestic sector. "These requirements need to be reviewed in the light of enhanced operations by foreign airlines, need of connectivity to new stations and liberal exchange of traffic rights with the foreign countries. MoCA will review these guidelines, from time to time, keeping in view evolving needs and growth of the sector", it says.

Another bone of contention "� the route dispersal guidelines which require airlines to deploy certain minimum capacity on routes connecting far-flung but sensitive area of the country and which are usually uneconomic routes "� has been left ambiguous, with the policy saying that "the guidelines will be reviewed by the MoCA with a view to further promote connectivity to remote areas and unconnected stations".

Similarly, on issues like higher foreign direct investment (FDI) in various segments of civil aviation, the policy document remains non-commital and promises to "review these from time to time to cater to the growing needs of this sector".

Regarding the airport infrastructure, the policy remains equally vague. It points out that according to the existing policy, no greenfield airport is normally allowed within an aerial distance of 150 kilometers of an existing airport. It goes on to say that "with a view to encourage development of greenfield airports in the country, the MoCA may relax this restriction in suitable cases".