New Delhi: Nearly every aviation industry trade and analyst group ranks India as one of the fastest growing markets in the world. And yet, there is no country on the planet that better typifies Virgin Airlines owner Richard Branson’s infamous joke: “What’s the quickest way to become a millionaire? Start off as a billionaire and get into the airline business.”
On Wednesday though, Prime Minister Narendra Modi’s government kicked off the first of a much-awaited series of reforms that experts and airlines say will fix regulatory imbalances and hopefully construct a level-playing field that will lead to greater overall industry profitability.
The new civil aviation policy, cleared by the cabinet, comes with airfare caps of Rs. 2,500 for flights that last an hour, an ecosystem of incentives and sops that will hopefully fund the airfare caps while fixing India’s ‘ghost airport’ problem and a focus on constructing low-cost or no-frill airports.
But the biggest change in government policy comes in the partial scrapping of the much-debated ‘5/20’ rule: a policy requirement that said India-based airlines could fly overseas routes only after they have operated domestic flights for five years and have at least 20 aircraft in their fleets. Under the new civil aviation policy, the five year component has been done away with, while airlines are still required to deploy 20 aircraft for domestic operations.
16/06/16 Anju Srivas/The Wire
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On Wednesday though, Prime Minister Narendra Modi’s government kicked off the first of a much-awaited series of reforms that experts and airlines say will fix regulatory imbalances and hopefully construct a level-playing field that will lead to greater overall industry profitability.
The new civil aviation policy, cleared by the cabinet, comes with airfare caps of Rs. 2,500 for flights that last an hour, an ecosystem of incentives and sops that will hopefully fund the airfare caps while fixing India’s ‘ghost airport’ problem and a focus on constructing low-cost or no-frill airports.
But the biggest change in government policy comes in the partial scrapping of the much-debated ‘5/20’ rule: a policy requirement that said India-based airlines could fly overseas routes only after they have operated domestic flights for five years and have at least 20 aircraft in their fleets. Under the new civil aviation policy, the five year component has been done away with, while airlines are still required to deploy 20 aircraft for domestic operations.
16/06/16 Anju Srivas/The Wire
