Cabinet likely to take up aviation policy today; may unveil capping of airfares at Rs 2,500

The cabinet may unveil a slew of passenger-friendly measures including capping of airfares at Rs 2,500 for an hour-long flight.

New Delhi: The Union Cabinet is likely to take up the much-awaited Civil Aviation Policy at its meeting on Wednesday, which may unveil a slew of passenger-friendly measures including capping of airfares at Rs 2,500 for an hour-long flight.

"The Union Cabinet is likely to take up the proposed aviation policy for its approval tomorrow," official sources said.

The Civil Aviation Ministry had sent the proposed policy to Cabinet for approval on June 3.

The NDA government had for the first time unveiled the policy draft in November 2014, subsequently replacing it with another draft in October 2015.

Initially, the policy was expected to be finalised in the last financial year as certain proposals were to be implemented from April 1, 2016.

Since then, the Government has been moving back and forth on the matter, primarily to strike a balance between various stakeholders on their glaring differences over issues like the 5/20 rule that allows a carrier to fly abroad only if it has 20 aircraft and has flown domestic for five years.

The policy aims to bolster the domestic aviation sector by tapping its high growth potential with provisions such as capping airfares at Rs 2,500 for a one-hour flight, auctioning of unilateral traffic rights, tax incentives for airlines, maintenance and repair works of aircraft besides mooting 2 per cent levy on all air tickets to fund regional connectivity scheme and providing viability gap funding for airlines to encourage operate on regional routes.

The issue of international flying norm or the 5/20 rule has witnessed extensive debate, with legacy carriers opposing any changes to the rule, while start-up airlines frantically demanding its scrapping.

Civil Aviation Minister Ashok Gajapathi Raju had last week virtually disapproved the continuance of this rule asking who has benefited from it, indicating that the government could even mull scrapping it.

Interestingly, exactly 10 years ago, on June 8, 2006, then Aviation Minister Praful Patel had said that "the draft civil aviation policy is ready and could be taken up by the Union Cabinet for approval this month itself."

Since coming out with the draft policy in October last year, the Ministry has held extensive consultations with various ministries, apart from stakeholders like airlines, airport operators and ground handling agencies.