Better Days Ahead for Civil Aviation

In India, travel by air has traditionally been regarded as a privilege for only the affluent sections of the society. As such, since independence, the Indian civil aviation industry had not been getting the attention of and support from the government essential for its healthy and speedy growth. The first and perhaps the only major reform the Indian airline industry went through before the Modi-led government came to power was in the early 1990s when the government opened the doors for the entry of the private sector into the Indian airline industry. In the initial years after decontrol, several newly established private carriers had to shut down as they were not able to cope with the hostile business environment.

However, in the recent years, the government has initiated far reaching reforms in this sector. The first major step was the release in mid-2016 of the National Civil Aviation Policy (NCAP) that, among other things, did away with the intensely controversial 5/20 Rule that had a crippling effect on the newly established private airlines desirous of operating international flights. The 5/20 Rule required newly established carriers to have the minimum specified number of aircraft on their inventory as also complete a minimum number of years of operation in the domestic sector before they could be permitted to undertake flights in the international segment.

The NCAP also provided fresh avenues for growth of the Indian airline industry through a major thrust on regional aviation. This is being achieved through the Regional Connectivity Scheme (RCS). Airlines participating in the scheme have assured financial support from the government to offset losses incurred if any, something that had been unheard of in the past. End April this year, Prime Minister Narendra Modi personally launched the RCS when he flagged off a flight from Shimla to Delhi. The most significant aspect of this policy is that it aims to facilitate air travel for the masses at affordable cost.

More recently, the business aviation segment of the Indian civil aviation industry got a shot in the arm when the Ministry of Civil Aviation (MoCA) did away with the mandatory requirement of obtaining prior clearance by way of a “YA Number” from the Directorate General of Civil Aviation (DGCA), the Indian regulatory authority, for a business aircraft planning to fly to a destination outside the country. Prior clearance by the DGCA was a complex and time consuming process and hence this modification in the regulations has come as a massive relief to business houses as well as individuals owing business jets. They can now undertake urgent business related flights on short notice. Under the new dispensation, they will only be required to file their flight plan with the Air Traffic Control a few hours before the flight. Hopefully, the MoCA will not only introduce further reforms, but will also make it easier for foreign registered aircraft to fly to India or over fly Indian territory.

The most recent event that has rekindled hope in the general aviation segment of the Indian civil aviation industry has been the flight aboard a seaplane by Prime Minister Modi from Sabarmati river to Dharoi dam in Mehsana district at the end of his election campaign in Gujarat. There is immense potential for seaplane services in India given the 7,500 km of coastline, the island territories of Andaman and Nicobar as also Lakshadweep, inland waterways as well as the large number of lakes and dams in the country. Efforts in the past by state governments as also by private agencies to establish seaplane services have not succeeded. Hopefully, the gesture by Prime Minister Modi to undertake a flight by a seaplane when he had other modes of travel available to him, will spur investment in this segment of general aviation especially as it comes at a time when the government is embarked on journey of reforms.

While the MoCA has taken a number of steps to introduce reforms in the Indian civil aviation industry, it has also recognised the need to shed incurable liabilities. One such step is disinvestment of the national carrier Air India that has amassed a loss of over 50,000 crore and has become a serious liability for the exchequer and the tax payer in the country. The MoCA along with a Group of Ministers is working overtime to finalise the contours of the strategic disinvestment of the national carrier.

Finally, one can be reasonably confident that the Indian civil aviation industry can look forward to better days ahead!