The Rajya Sabha has passed the Aircraft (Amendment) Bill, 2020 which seeks to amend the Aircraft Act, 1934, it was passed by Lok Sabha earlier.
- The Act regulates the manufacture, possession, use, operation, sale, import and export of civil aircrafts and licensing of aerodromes.
Provisions of Bill :
- The Bill will provide statutory status to regulatory institutions like the Directorate General of Civil Aviation (DGCA), the Bureau of Civil Aviation Security (BCAS) and the Aircraft Accident Investigation Bureau (AAIB).
- DGCA will carry out oversight and regulatory functions with respect to matters under the Bill.
- BCAS carries out regulatory oversight functions related to civil aviation security.
- AAIB carries out investigations related to aircraft accidents and incidents.
- The statutory status to these regulatory institutions would improve India’s aviation safety ranking as suggested by the International Civil Aviation Organization (ICAO).
- The Bill proposes to increase the fine amount for violations of rules from ₹10 lakh to ₹1 crore for aviation industry players.
- Under the Bill, the central government may cancel the licences, certificates or approvals granted to a person under the Act if the person contravenes any provision of the Act.
- The Act exempted aircrafts belonging to the naval, military, or air forces of the Union.
- The Bill expands this exemption to include aircrafts belonging to any other armed forces other than these three.
Challenges for Aviation sector in India :
There has been a drop in demand and airline companies are under stress due to the COVID-19 outbreak.
- Infrastructure deficit: unavailability of land to expand airports at their current sites, particularly in major cities
- High Fuel Costs: Fuel cost as a percentage of operating charges amounts to 45% in India as compared to the global average of 30 per cent.
- Procedural Complexities: Taxes and approvals by both Central and States governments increases the transaction costs of the aviation sector
- Inadequate Human Resource Capabilities: Shortage and gaps in the availability of industry-recognised skills – from airline pilots and crew to maintenance and ground handling personnel – constrains the growth of different segments of the sector.
- Weak MRO sector: 90% of the Indian MRO work is outsourced to countries like Singapore, Dubai, UAE, Sri Lanka and others.
Few recent reforms :
- Efficient Airspace Management: Route dispersal guidelines (RDG), mandates airlines to fly a certain percentage of flights in smaller, unprofitable air routes. The government announced that these restrictions on the utilisation of Indian airspace will be eased.
- Development of MRO Sector: The convergence between the Defence sector and the civil MROs will be established to bring down the maintenance cost of airlines.
- Development of more airports under the PPP model with a view to improve the aviation infrastructure without the government having to pump in additional funds
- Overall Economic reform measures: Beneficial measures like extending moratoriums, reducing interest rates, improving liquidity etc. will provide impetus to the economic recovery process, including for the aviation sector.