A new aviation policy, showcasing key areas of reform, is ready for clearance by the Union cabinet in the run-up to the government’s second anniversary. The civil aviation ministry, having completed inter-ministerial consultations on the policy, has moved a cabinet note on it and is pushing for clearance next week.
The new policy will be showcased as a key reform by the government—one meant to increase regional connectivity across India. With 80 million passengers already and growing at 20% annually, India is expected to become the third largest aviation market by 2020.The main proposals of the policy include allowing new airlines to fly abroad, the introduction of more regional flights and a new formula for granting bilateral flying rights.
The regional connectivity recommendations may include a proposal for a cess on airfare—each flight could be charged an additional Rs.8,000—and unprofitable routes offset with the collected corpus. The initial corpus is expected to be about Rs.500 crore annually.