Draft gives wings to aviation privatisation

It envisages private sector participation as a major thrust area and promises that the Government would reduce its equity in Indian Airlines, Air India and Pawan Hans Helicopter Corporation. The policy document proposes to allow foreign equity up to 40 per cent and NRI investment up to 100 per cent in new domestic airlines. No minimum aircraft may be required for an operator to start passenger or cargo transport services.

Also, foreign equity participation up to 74 per cent in construction, upgradation and maintenance of airports might be automatically approved. With special permission from theGovernment, this could go up to 100 per cent. As per the document, the Government would also promote private sector participation in setting up of training institutes for pilots, flight engineers, maintenance personnel and air-traffic controllers, and in security of airports and airlines.

The Government also aims to promote private air-taxi service linking smaller towns, and proposes to provide them aviation fuel at the cost provided to international airlines. Besides sales tax on the fuel would be cut from the existing 30 per cent to 4 per cent and other taxes too would be reduced.

The policy proposes to form a statutory autonomous body, Civil Aviation Authority (CAA), for regulating the sector, ensuring safety in the wake of the recent hijacking and boosting effective air transport in the country. The new authority will not only incorporate the existing Directorate General of Civil Aviation but also have more autonomy and powers.

The CAA will set the standards for various agencies and personnel of thecivil aviation sector; issue licences to them; ensure these agencies fulfill norms and standards; look out for unfair trade practices; provide a level-playing field; and study trends in domestic and international civil aviation sectors.

Under the new policy, the Government also proposes to let out excess land with the Civil Aviation Ministry for commercial purposes and aviation-related facilities like cargo complexes and aircraft maintenance units.

The policy proposes to ensure that international passenger traffic is cleared within 45 minutes of arrival and 60 minutes for departure. In case of domestic flights, it wants to reduce this to within 30 minutes of arrival and 45 minutes for departure.

In the aftermath of the hijacking, the Government also proposes to tighten aviation security, putting it on a par with international standards. Strict security standards and programme would be set by the Bureau of Civil Aviation Security under the CAA as per the International Civil Aviation Organisation (ICAO)standards. These would be enforced through regular security audit of the agencies involved.

The draft proposes that airport security be the primary responsibility of the AAI, whether an airport is managed by the AAI or a private operator. Aircraft security, on the other hand, would be the primary responsibility of the airline operator.