India sets new aviation policy
Print Edition
INDIA overhauled rules governing the world’s fastest growing aviation market yesterday to make it easier for new airlines to fly overseas, aiming to boost air travel and economic growth.
Prime Minister Narendra Modi’s government presented the national civil aviation policy, which has been years in the making, in a bid to make flying more affordable for India’s expanding middle class, bolster competition and get more of the country connected.
Implementing the policy is a sign that Modi’s government is beginning to find traction with key reforms, which also included the recent introduction of new real estate and bankruptcy laws, after a series of setbacks in his first two years in office.
Under the policy, domestic carriers will no longer have to operate for five years before they can fly abroad, known as the 5/20 rule, although they must still deploy 20 aircraft or 20 percent of total capacity in India, whichever is higher.
The change, effective immediately, is a boost for Tata Group’s two recent ventures — Vistara, in partnership with Singapore Airlines, and AirAsia India, with Malaysia’s AirAsia Bhd — and could encourage other foreign carriers to enter the country.
“We need more airlines, more aircraft serving our Indian skies, so if more airlines want to come to India they are welcome,” aviation minister Ashok Gajapathi Raju told reporters.
Passenger numbers on domestic flights jumped 21 percent in 2015 to more than 80 million. The government aims to increase that number to 300 million by 2022.
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