Two airline stocks rose by 0.46% to 0.64% at 10:00 IST on BSE after the Ministry of Civil Aviation after trading hours yesterday, 10 November 2014, released the Draft Civil Aviation Policy.
Meanwhile, the S&P BSE Sensex was up 94.19 points or 0.34% at 27,968.93.
Jet Airways (India) (up 0.46%) and SpiceJet (up 0.64%) edged higher.
Shares of Jet Airways had jumped 6.82% on Monday, 10 November 2014. Shares of SpiceJet had jumped 5.02% on Monday, 10 November 2014.
The Draft Civil Aviation Policy notes that airports are to be designed as integrated multi-modal hubs, so that they provide the best possible service levels as well as potential for growth. Secretary, Ministry of Civil Aviation, V. Somasundaran said that an integrated multi-modal hub should include rail, metro, bus and truck connectivity as well as accommodation and other services. While developing airports, it is equally essential to ensure that related sectors such as access to manufacture, business, tourism and pilgrim centres are developed, the Ministry of Civil Aviation said in a statement.
The six metropolitan airports at Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad would be developed as major international hubs and would in future be the main access points for international travel to and from India. In future a hub-and-spoke model would be followed, which would also facilitate the development of regional networks and air connectivity as a whole, the Ministry of Civil Aviation said. The Draft Civil Aviation Policy puts emphasis on rationalizing the cost of Aviation Turbine Fuel (ATF). Due to high rates of taxes, the cost of ATF in India is 40 to 45% higher than the international costs. Steps will be taken in association with the Ministry of Finance and state governments to rationalize the rate of taxes so that the costs for Indian carriers are competitive, the Ministry of Civil Aviation said.
The government's objective will be to provide optimum air connectivity to all regions, subject to commercial viability. A special package will be developed for the North-Eastern Region to improve air connectivity and provide linkages to remote locations. The 5/20 guidelines will be reviewed with a view to encouraging the entry of new Indian carriers.
For development of the civil aviation sector, provision of Air Navigation Services (ANS) of international standards is essential. The Airports Authority of India has taken several initiatives in this direction. These would be intensified with the objective of reducing flying time, elimination of crowding at airports, direct routing of aircrafts from destination to destination and enhancing communication and navigation services to international standards.
Regarding development of the cargo sector, the government proposes to substantially develop the transport of cargo by air for which there is considerable potential. To achieve the objective, the six metro airports will be developed as regional cargo hubs, integrating multi-modal transport facilities, cold chains and other commodity specific requirements. The turnaround time for cargo will be upgraded to international standards. Air Freight Stations will be developed in different parts of the country to streamline customs clearance and to reduce congestion in the airports.
The Draft Civil Aviation Policy has been released for consultation with public and stakeholders within three weeks, after which six to seven groups of experts would be constituted to interact with stakeholders and review the inputs received during the process. Civil Aviation Minister Ashok Gajapathi Raju Pusapati said that the new Civil Aviation Policy is expected to be in place by January 2015.
Fall in crude oil prices also supported airline stocks. Jet fuel or aviation turbine fuel (ATF) typically makes up almost half of an airline's operating cost. Prices of jet fuel are directly linked to crude oil prices.
Brent crude for December delivery was down 42 cents at $81.92 a barrel after settling more than $1 lower in the previous session on Monday, 10 November 2014. The December contract expires on Thursday, 13 November 2014.
Powered by Capital Market - Live News
