A game changer for the industry
The newly launched National Civil Aviation Policy has been welcomed by the industry. Some opined that involving the stakeholders’ suggestions was the best thing, while others still want to wait and watch how it pans out.
The Civil Aviation Policy, which was much-awaited by all the stakeholders, addresses every issue. The roadmap has been laid out for all the stakeholders to develop on the policy. Apart from that regional connectivity is extremely important in this country. What we’ve seen is explosion of traffic between metros and Tier-I cities, but nothing much was done to connect Tier-III cities. But with this policy smaller towns would also get a chance to get connected and come in the mainstream.
The key focus of NCAP 2016 is on affordability, connectivity and ease of doing business. The regional connectivity scheme (RCS) under NCAP will connect India’s remote unconnected regions, boost tourism, create jobs and stimulate the economy in Tier 2-3 cities. The highly illogical and anti-competition 5/20 rule has been replaced with 0/20. However, the NCAP is unfortunately silent on other issues like formation of an independent Civil Aviation Authority (CAA), privatisation of Air India, market-listing of AAI, hive-off of Air Navigation Services (ANS) from AAI. The road ahead will be tougher as we go for its implementation in letter and spirit.
It’s a very good thing that there is a Civil Aviation Policy after so many years. There are some extremely positive features of the policy including the effort that is being made to increase regional connectivity as well as the effort to ensure that MROs in India become viable and profitable. The fact that the government is encouraging setting up of many new Brownfield airports and has even allowed self-handling by airlines, is a great positive as well. Although there are some areas of concern and we hope that the government is going to be open to suggestions while formulating the rules to this policy.
It’s a very bold step and was required for a very long time. There is indirect benefit to the outbound industry because after the 0/20 rule, an increased number of airlines will be flying out of India. However, one thing that the government must look at is the number of seats being utilised for outbound. There are almost 20 million people travelling out of India, and if these people do not utilise the infrastructure, it is going to get difficult. Airlines are going to withdraw if their seats are not utilised.