On November 10 this year, after having been in power for five-and-a-half months, the Modi-led NDA Government unveiled a draft civil aviation policy, something that had been awaited by the stakeholders in the Indian civil aviation industry for over 15 years. The erstwhile UPA Government had in fact drafted a policy on civil aviation but for one reason or another, it remained buried in the files at the Ministry of Civil Aviation (MoCA). This was attributable perhaps to the policy paralysis the then government was reported to be afflicted with especially during their second term. However, the civil aviation policy drafted by the previous government has, under directions of the new government, been subjected to a comprehensive review by the MoCA, expanded, refined and issued. However, the new policy would be finalised only after consultations and debate with the stakeholders and is expected to be ready for implementation by January next year after suitable modifications based on inputs received.

As per statements from the civil aviation establishment, the new policy is aimed at wide ranging reforms in the industry to meet with the challenges of growing passenger traffic and other rising expectations of the nation. The draft policy, which is a four-page document now available in the public domain, covers a number of areas of the Indian civil aviation industry the details of which have been tabulated under the broad headings Development of Airports, Rationalisation of the Price of Aviation Turbine Fuel (ATF), Development of the Air Cargo Sector, Enhancement of Regional Connectivity, Institutional Reforms, Development of the Maintenance, Repair and Overhaul (MRO) Industry, Modernisation of Air Navigation Services, Development of Helicopter Aviation and Implementation of e-Governance.

The thrust of the new policy appears to be towards enhancing regional air connectivity, developing six major metro airports as international travel and transit hubs of which there is none in the country at present, create additional airports through the public-private participation (PPP) mode, reduce the cost of ATF through reduction of taxes especially by the states and other levies, promote air cargo services both domestic and international, facilitate the establishment of MRO facilities and services, adopt measures such as building heliports and reduce operating costs to exploit the potential of the rotary-wing segment of the industry and improvement in passenger facilitation services. In the regime of Institutional Reforms, the proposal to corporatise the Airports Authority of India (AAI) and the Pawan Hans Helicopters Limited is certainly a positive step as it will help revitalise these organisations and make them far more efficient than they are now.

The unveiling of the draft civil aviation policy did immediately impact market sentiments as was manifest in the surge in the stock market in respect of Indian carriers Jet Airways and SpiceJet. However, the draft policy also drew criticism from different quarters. The sentiment in some of the segments of the industry is that the draft civil aviation policy has been formulated only in general terms, lacks details and fails to address the real issues and problems the Indian civil aviation industry is plagued with. Amber Dubey, Partner and India Head of Aerospace and Defense, KPMG, in India opined: “The draft civil aviation policy reads like a feel-good document, devoid of specific policy statements on a number of burning issues.”

The Indian civil aviation industry remains strangulated in the vice-like grip of the bureaucracy that prevents organisations such as the Directorate General of Civil Aviation (DGCA) from being an effective facilitator. Apart from corruption that pervades almost all segments of society, government or business, the Indian civil aviation industry has been weighed down by the crushing burden of taxes and levies that stunt its growth. This has had a debilitating impact especially on the MRO industry. Operators, particularly in the regime of business and general aviation, find it less expensive and less problematic to avail of MRO services outside India. A sad commentary on the state of affairs indeed!

The apprehension that grips some segments of the Indian civil aviation industry is that the new policy does not appear to have the strength or character to make a difference and turn into reality the reforms sought by it. The Business Aircraft Operators Association (BAOA), however, is of the view that this initiative by the government is a step in the right direction. In the final analysis, however, the new civil aviation policy can be meaningful and effective only if the MoCA has the will and determination to implement its provisions in letter and spirit in a respectable time frame.