The government has proposed to allow domestic carriers to fly on international routes before they meet the existing restrictive norms, provide fiscal incentives for maintenance, repair & overhaul (MRO) firms, boost regional connectivity among other measures in its draft national civil aviation policy.
One of the key aspects of the new policy would be the final decision on the international flying norms for domestic airlines. Currently, GoAir, AirAsia and Vistara among a few other recent entrants in aviation are not allowed to fly on international routes due to the 5-20 rule that mandates airlines to have at least five years of domestic flying experience besides 20 aircraft in operation before they can fly abroad.
Although it was expected that the government would scrap these conditions to allow for more friendlier business environment and more competition in the skies, the draft policy note has left all options open.
It has called for suggestions on whether it should be retained or scrapped or replaced with the DFC rules, which has already been opposed by airlines as too complex.
The draft note say the third alternative would require domestic airlines to accumulate 300 domestic flying credit (DFC) before commencing flights to SAARC countries and countries beyond 5,000 km radius from Delhi. It added that they will need to accumulate 600 DFC before starting flights to the remaining parts of the world.
All domestic airlines will be required to earn at least 300 DFC per annum in order to maintain their international flying rights. The airlines would be free to re-deploy their excess capacity (above 300) between domestic and foreign operations and also trade them.
The draft note sought to boost regional connectivity and drive India as a MRO hub with tax incentives.
It also talks about liberal regime for bilateral flying rights and easier code sharing norms between airlines; allowing private security agencies for non-core security functions at airports and easier flying norms for helicopters while adding that separate regulations for helicopters will be notified by aviation regulator DGCA by April 1, 2016.
For the full draft policy note click .