PSU monopoly on jet fuel may end

AVIATION policy to regulate air fares, airports

The proposed Civil Aviation Policy envisages setting up an airport economic regulatory authority (AERA) to regulate air tariffs and performance standards for the domestic aviation sector.

The policy will also have provisions to end the monopoly of state-run oil companies in providing fuel at the Indian airports. This, experts say, will lead to reduction in fuel prices.

"Provisions regarding foreign investment and those allowing domestic carriers to fly overseas have already been announced. The draft of the policy is ready and is being circulated now," Civil Aviation Minister Praful Patel said on the sidelines of a seminar organised by Assocham. The policy will be finalised in the next two weeks, he said.

The Civil Aviation Policy will have clauses that will allow restructuring of airports under Airports Authority of India (AAI) to ensure improvement of infrastructure.

It is also likely to propose an essential air services fund to provide subsidy support to various airlines. Sources said, the policy will look at liberalising the existing air services agreement with various countries to ensure better usage of air capacity in international flights.

Integrated development of airports and airport complexes will also be addressed. The government, officials said, is considering providing fiscal incentives at par with other infrastructure projects such as exemptions from Customs and excise duties and other tax holidays to airport projects.

"The policy will have provisions to ensure that airport infrastructure is developed in keeping with a long-term perspective," Patel said.

As a part of the overall development of airports in Delhi and Mumbai, the government is also proposing metro rail connectivity to the two airports from the city centres and developing them in line with some of the best airports in the world.

On the flight of pilots from the public sector carriers Indian Airlines and Alliance Air "" which is affecting their flight schedule""Patel said the government will convene a meeting of all airlines to decide on ways to prevent new entrants in the sector poaching on experienced pilots.

On opening up of international routes to private operators, Patel said, "I would encourage all private operators to open new international routes and not cannibalise only on existing routes created by Air India."