The Union Cabinet has cleared a new aviation policy that aims to make air travel more consumer friendly. Caps on select air fares, an increase in regional connectivity and hike in compensation because of flight cancellations, are some of the measures that have been incorporated.
The new plan will also replace the decade old rule to ease rules for airlines to fly overseas.
The policy proposes to cap airfare at Rs 2,500 for one-hour flights between smaller towns and cities. The draft says it will refund 80% losses incurred by airlines because of the cap.
For flight cancellations announced within 24 hours of departure, compensation has been raised to nearly Rs 10,000 but airlines will get tax incentives for operating on unserved routes.
The target of 30 crore air tickets per year in the domestic sector by the year 2022 has been raised to 50 crore by 2027. For international travel, the target is now Rs 20 crore by 2027.
New airlines with 20 planes and in operation for less than five years can now operate overseas flights. The earlier 5/20 rule made it mandatory for operators to have minimum 20 planes and 5 years of experience in operating domestic flights.
However consumers will have to pay an extra 2 per cent cess in domestic and international tickets for a regional connectivity fund.
Revival of old air strips, single window for all aviation related transactions and complaints by the Directorate General of Civil Aviation have also been incorporated in the new policy that also proposes real time safety tracking.
“The aim is to ensure affordable, convenient and cheap flying” for the people, Civil Aviation Secretary RN Choubey said.
The NDA government unveiled the policy draft first in November 2015. It went through several rounds of inter-ministerial discussions in the last 18 months and was revised in October 2015.
India has currently the fastest growing aviation industry with over 139.32 million domestic and over 50 million international air travellers in 2014-15.
With new policy, airline stocks jumped as much as 3-5 per cent.
(With inputs from PTI)