civil-aviation-sector

Context: India is not allowing UAE airlines to operate additional repatriation flights. The move comes following the UAE government’s curbs on carrying passengers to Dubai on Air India and private airlines.

More on news:

  • Air India began repatriation flights under Vande Bharat Mission from May 6 and domestic and West Asian airlines had been allowed to operate charter flights from May 25.
  • Requests have also been made by UAE airlines to allow transport of passengers from India and that is pending.

 

Background:

  • Civil aviation is one of two major categories of flying, representing all non-military aviation, both private and commercial. The civil aviation sector contributed USD8.9 billion to India’s GDP in 2014 and supported 1.31 million direct, indirect and induced aviation jobs. 
  • In 2016, the demand for domestic air travel was twice that in China. 
  • India’s domestic air traffic made up 69 per cent of total airline traffic in South Asia. 
  • The World Economic Forum’s Global Competitiveness Report, 2018 ranks India as 53rd out of 140 countries worldwide in air transport infrastructure. 
  • The Airport Authority of India (AAI) aims to bring around 250 airports under operation across the country by 2020.

Current Scenario: 

  • India’s civil aviation sector has been growing steadily: the number of passengers was 158 million in 2016-17. 
  • Domestic passenger traffic increased at a CAGR of almost 10 per cent between 2007-08 and 2016-17 while international passenger traffic grew at a CAGR of 8.07 per cent during the same period.
  • Between 2014-15 and 2016-17 in particular, traffic growth in the domestic passenger segment was 48 per cent and 20 per cent in the international segment. 
  • India’s scheduled domestic air transportation for passengers and goods has grown by 14 per cent and 12 per cent respectively in 2018-19. Total domestic and international passengers were 204 million in 2018-19. 
  • Maintenance Repair & Overhaul (MRO) facilities: Currently annual import of MRO services by airlines in India is about `9,700 crore. 
  • With airlines’ fleet growing annually by 100, the size of domestic and imported Indian airline MRO is set to grow annually to `21,600 crore in the next five years and to `36,000 crore once the fleet size reaches 2,000 aircraft.
  • Aviation Turbine Fuel: High and unpredictable changes in global crude oil prices during 2018-19 have been compounded by a high domestic tax regime on aviation turbine fuel. These have led to the demand from airline carriers and general aviation to bring the fuel within the ambit of GST with input tax credit in order to create a level playing field for them vis-à-vis international carriers.

Significance of Air Transport:

  • High Speed: It is the fastest means of transport which can transport passengers and goods within minimum time viz. other transport. 
  • Strategic Importance:It has great strategic relevance which can be harnessed for internal and external security. 
  • Easy transport of costly and light goods: It is convenient to send costly, light and perishable goods through air transport which can’t be transported via road or rail.
  • Free from physical barriers: Air transport is free from physical barriers like rivers, mountains and valleys etc. thereby ensuring seamless travel across the globe. 
  • Useful in natural calamities: During earthquake, flood, accidents and famine air transport is used extensively as rail and road are not very effective for rescue operations.

National Civil Aviation Policy 2016 

The policy aims to take flying to the masses by making it affordable and convenient by establishing an integrated ecosystem which will lead to significant growth of the civil aviation sector.

Key features of Civil Aviation policy:

  • Regional Connectivity Scheme (RCS): It will help in enhancing connectivity and travel in the unserved and unconnected regions of the country. UDAN scheme has been launched in 2016 to enhance regional connectivity.  
  • Dispensation of 5/20 Requirement: All airlines can now commence international operations provided that they deploy 20 aircraft or 20% of total capacity (in terms of average number of seats on all departures put together), whichever is higher for domestic operations. Earlier minimum 5 years experience and 20 aircrafts were required.
  • Route Dispersal Guidelines (RDG): Category I to be rationalized based on a transparent criteria, i.e., flying distance of more than 700km, average seat factor of 70% and above and annual traffic of 5 lakh passengers
    • The percentage of Cat.I traffic to be deployed on Cat.II, and II A will remain the same while for CAT III it will be 35%. Routes to Uttarakhand and Himachal Pradesh included in Category II.
    • Revised categorization to apply from winter schedule of 2017.
    • Withdrawal or revision of domestic operations to and within North East Region etc, subject to full compliance of RDG, can be done under prior intimation to MoCA at least three months before withdrawal or revision of the service.
  • Boost Maintenance,Repair and Overhaul Sector: 
    • MoCA will persuade State Governments to make VAT zero- rated on MRO activities. 
    • Provision for adequate land for MRO service providers will be made in all future airport/heliport projects where potential for such MRO services exists.
    • Airport royalty and additional charges will not be levied on MRO service providers for a period of five years from the date of approval of the policy.
  • UDAN Scheme (UDE DESH KA AAM NAAGRIK)/REGIONAL CONNECTIVITY SCHEME (RCS) :The Ministry of Civil Aviation’s regional connectivity scheme, UDAN, is a 10-year scheme, which will promote balanced regional growth and make flying affordable for the population.  
    • It will help enhance connectivity to the country’s unserved and underserved airport in Tier 2 and Tier 3 cities with the big cities and also with each other.  
    • The Airports Authority of India (AAI) is the implementing authority and scheme is a key component of National Civil Aviation Policy.
    • It will be applicable on flights which cover distances between 200 km and 800 km with no lower limit set for hilly, remote, island and security sensitive regions.
    • Airlines have to provide a minimum of 9 and a maximum of 40 UDAN Seats at subsidized rates whose cost would be covered through Regional Connectivity Fund.  The contribution to fund will be made by both the centre and states in 80:20 ( For NE states and UTs it is 90:10)
  • Ground Handling Policy: The Ground Handling Policy/ Instructions/Regulations will be replaced by a new framework:
    • The airport operator will ensure that there will be three Ground Handling Agencies (GHA) including Air India's subsidiary/JV at all major airports as defined in AERA Act.
    • At non-major airports, the airport operator decides on the  number of ground handling agencies, based on the traffic output, airside and terminal building capacity.
    • All domestic scheduled airline operators including helicopter operators will be free to carry out self-handling at all airports through their regular employees.
    • Hiring of employees through manpower supplier or contract.
    •  Workers will not be permitted for security reasons.
  • Aviation Security, Immigration and customs
    • MoCA will develop 'service delivery modules' for aviation security, Immigration, Customs, quarantine officers etc in consultations with respective Ministries/Department.
    • Allow Indian carriers to provide security services to other domestic airlines subject to approval of BCAS.
    • Encourage use of private security agencies at airports for non- core security functions to be decided in consultation with MHA.
    • Such agencies should be registered under the Private Security Agencies (Regulation) Act, 2005 and will also be separately accredited by BCAS.
    • Subject to minimum benchmarks being met, security architecture at the different airports will be proportionate to the threat classification and traffic volume.
  • Helicopters and Charters I
    • Separate regulations for helicopters will be notified by DGCA after due stakeholder consultation.
    • MoCA to coordinate with Govt agencies and other helicopter operators to facilitate Helicopter Emergency Medical Services.
    • Helicopters will be free to fly from point to point without prior ATC clearance in airspace below 5000 feet and areas other than controlled or prohibited or restricted airspace.
  • Aviation Education and Skill Building: Estimated direct additional employment requirement of the Civil Aviation Sector by 2025 is about 3.3 lakh . 
    • All training in non licensed categories will conform to National Skill Qualification Framework standards. MoCA will provide full support to the Aviation Sector Skill Council and other similar organisations/agencies for imparting skills for the growing aviation industry . 
    • There are nearly 8000 pilots holding CPL but who have not found any regular employment. MoCA will develop a scheme with budgetary support for Type- rating of Pilots. The detailed scheme will be worked out separately.
  • International UDAN:Under this plan is to connect India’s smaller cities directly to some key foreign destinations in the neighbourhood. Such direct air connectivity, it is hoped, would promote the development of the city and the State by wooing tourists and businesspeople to travel via smaller towns.  
    • The scheme seeks to make use of the open skies policy that India has with other Asian countries that allows direct and unlimited flights to and from these nations to 18 Indian destinations.  Only the State government will provide the financial support for flights under international UDAN. 
  • Digi Yatra Platform:  It is a biometric based digital processing system that avoids multiple checks of passengers at the airport by issuing a unique Digi Yatra ID through which a passenger can enter and fulfill other checking requirements at the airport . 

About STAR alliance:

  • The Star Alliance network was established in 1997 as the first truly global airline alliance to offer worldwide reach, recognition and seamless service to the international traveller. 
  • Its acceptance by the market has been recognized by numerous awards, including the Air Transport World Market Leadership Award and Best Airline Alliance by both Business Traveller Magazine and Skytrax. 
  • The member airlines are: Aegean Airlines, Air Canada, Air China, Air India, Air New Zealand, ANA, Asiana Airlines, Austrian, Avianca, Avianca Brasil, Brussels Airlines, Copa Airlines, Croatia Airlines, EGYPTAIR, Ethiopian Airlines, EVA Air, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Shenzhen Airlines, Singapore Airlines, South African Airways, SWISS, TAP Portugal, Turkish Airlines, THAI and United. Overall, the Star Alliance network currently offers more than 18,500 daily flights to 1,330 airports in 192 countries.
  • The Alliance offers passengers a choice of Silver or Gold Status benefits across the alliance relevant to the passengers frequent flyer tier level. 
  • The traveler’s status is recognized around the world throughout the Star Alliance network at all member airlines. 
  • Passengers automatically get the alliance benefits on travelling on the member airline also ensuring more mileage points at the same time.
  • Whenever a member of the frequent flyer programme travels on any of the Star Alliance member airlines and flies with another member airline he can earn and redeem miles or points on one frequent flyer programme.

About International Civil Aviation Organisation: 

  • The International Civil Aviation Organization is a specialized agency of the United Nations under ECOSOC (Economic and Social Council). 
  • It was formed in April 1947.
  • As of April 2019, there are 193 ICAO members, consisting of 192 of the 193 UN members (all but Liechtenstein, which lacks an international airport), plus the Cook Islands.  Despite Liechtenstein not being a direct party to ICAO, its government has delegated Switzerland to enter into the treaty on its behalf, and the treaty applies in the territory of Liechtenstein. 
  • It fosters the planning and development of international air transport to ensure safe and orderly growth.
  • Its headquarters is located in the Quartier International of Montreal, Quebec, Canada.  
  • The ICAO Council adopts standards and recommended practices concerning air navigation, its infrastructure, flight inspection, prevention of unlawful interference, and facilitation of border crossing procedures for international civil aviation. 
  • ICAO defines the protocols for air accident investigation that are followed by transport safety authorities in countries signatory to the Chicago Convention on International Civil Aviation.

Constraints: 

  • Capacity and infrastructure: Mumbai and Chennai airports are already close to saturation. Capacity and infrastructure constraints could decrease efficiency and safety and have negative economic effects. 
  • Skilled workers: According to a study conducted by the Ministry of Civil Aviation, Indian aviation could directly support 1.0 to 1.2 million jobs by 2035. This implies that about 0.25 million persons will need to be skilled over the next 10 years.  Shortage and gap in the availability of industry-recognised skills – from airline pilots and crew to maintenance and ground handling personnel – could constrain the growth of different segments of the sector. 
  • High cost to passengers and air cargo:  
    • Tariff determination: The Ministry of Civil Aviation has mandated that all airports move from a single to a hybrid till structure. Although this is beneficial as it incentivizes infrastructure investment, it raises costs for airlines and passengers.
    • Taxes on aviation turbine fuel (ATF): Due to high taxes and lack of competition among providers, ATF is relatively expensive in India. Since it remains outside the GST network, there are also regional disparities in its price. 

Way forward:

  • Enhance aviation infrastructure :Complete the planned airports under the UDAN initiative in a time-bound manner.  The infrastructure capacity in the 10 biggest airports (in terms of traffic) should be significantly augmented.  
  • There is a need to include provisions for domestic hub development while auctioning traffic rights. 
  • Increase investment in the sector through financial and infrastructure support :Reduce taxes on MRO services and consider granting infrastructure status for MRO.  Monetize vacant real estate near AAI airports in all major centres of traffic to increase non aeronautical revenues.
  • Address shortage of skilled manpower: Promote collaboration between original equipment manufacturers (OEMs), industry and educational institutes to teach the latest concepts in the aviation industry including management principles, IT in aviation, etc.
  • Ease the regulatory environment for airports: Deregulate further and open up the aviation market to help increase passenger and freight traffic in India. Currently FDI over 49% in Aviation sector operations requires government approval.
  • Prioritize aviation safety:
    • Shift focus to pre-empting and preventing accidents/incidents.  There should be zero tolerance of safety violations.  
    • DGCA should be given autonomy for an effective aviation safety oversight system.  It should also be authorized to impose fines and penalties depending upon the nature of violations.  
    • DGCA should create a single-window system for all aviation related transactions, queries and complaints.

With the right policies and relentless focus on quality, cost and passenger interest, India would be well placed to achieve its vision of becoming the third-largest aviation market by 2020. However the real achievement will be witnessed only when every district in the country would be connected to the air grid and the common man would be able to access and afford the same.

Source of the image: Indian express