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Seven things that defined aviation sector in 2016

Seven things that defined aviation sector in 2016

In June, the central government introduced the much-awaited civil aviation policy, the first such integrated policy for the sector since independence. The sector is likely to benefit immensely from the policy.

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Manu Kaushik
  • Dec 21, 2016,
  • Updated Dec 23, 2016 12:36 PM IST

 

  1. In June, the central government introduced the much-awaited civil aviation policy, the first such integrated policy for the sector since independence. The sector is likely to benefit immensely from the policy. The highlight includes bringing down the airfares to about Rs 2,500 per passenger for a one-hour flight. The ministry will support airlines in the form of viability gap funding.
  2. Subsequently, in October, the government launched the UDAN scheme, acronym for Ude Desh Ka Aam Naagrik, that will make flying affordable for small town common man. Under the scheme, a new cess will be applicable on domestic flights - Rs 7,500 for every flight up to 1,000 km, Rs 8,000 for those between 1,000 and 1,500 km and Rs 8,500 above 1,500 km. The move has been challenged in court by airlines.
  3. The government firmed up plans to revive non-operational airstrips and airports under the civil aviation policy. It will cost between Rs 50 and Rs 100 crore per airport. The selection of airports will be based on passenger demand from these airports. The revival is to be done in consultation with respective state governments and airlines.
  4. The controversial 5/20 rule was replaced with 0/20 rule which means that all domestic carriers can start flying on international routes if they deploy 20 aircraft or 20 per cent of the total capacity. The decision would benefit new airlines such as Vistara, AirAsia India and Air Costa whereas older airlines such as IndiGo, Jet Airways and SpiceJet will now have to prepare for more competition on international routes.
  5. The government announced that it will enter into open sky agreements with SAARC countries and countries within 5,000 kms from Delhi.
  6. The return of Jet Airways into profitability in 2015/16 after four consecutive years of registering losses. The carrier introduced a series of cost-cutting measures in addition to more sweating of its aircraft, better network planning, and renegotiating old contracts.
  7. In June, the aviation regulator DGCA capped the excess baggage and cancellation charges. As per the new rules, the carriers cannot fix cancellation charges at more than base fares plus fuel surcharge. Moreover the excess baggage charges have been capped at Rs 100 per kg for 5 kg over the 15 kg that airlines offer for free. The decision has impacted the revenues of most airlines.

 

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  1. In June, the central government introduced the much-awaited civil aviation policy, the first such integrated policy for the sector since independence. The sector is likely to benefit immensely from the policy. The highlight includes bringing down the airfares to about Rs 2,500 per passenger for a one-hour flight. The ministry will support airlines in the form of viability gap funding.
  2. Subsequently, in October, the government launched the UDAN scheme, acronym for Ude Desh Ka Aam Naagrik, that will make flying affordable for small town common man. Under the scheme, a new cess will be applicable on domestic flights - Rs 7,500 for every flight up to 1,000 km, Rs 8,000 for those between 1,000 and 1,500 km and Rs 8,500 above 1,500 km. The move has been challenged in court by airlines.
  3. The government firmed up plans to revive non-operational airstrips and airports under the civil aviation policy. It will cost between Rs 50 and Rs 100 crore per airport. The selection of airports will be based on passenger demand from these airports. The revival is to be done in consultation with respective state governments and airlines.
  4. The controversial 5/20 rule was replaced with 0/20 rule which means that all domestic carriers can start flying on international routes if they deploy 20 aircraft or 20 per cent of the total capacity. The decision would benefit new airlines such as Vistara, AirAsia India and Air Costa whereas older airlines such as IndiGo, Jet Airways and SpiceJet will now have to prepare for more competition on international routes.
  5. The government announced that it will enter into open sky agreements with SAARC countries and countries within 5,000 kms from Delhi.
  6. The return of Jet Airways into profitability in 2015/16 after four consecutive years of registering losses. The carrier introduced a series of cost-cutting measures in addition to more sweating of its aircraft, better network planning, and renegotiating old contracts.
  7. In June, the aviation regulator DGCA capped the excess baggage and cancellation charges. As per the new rules, the carriers cannot fix cancellation charges at more than base fares plus fuel surcharge. Moreover the excess baggage charges have been capped at Rs 100 per kg for 5 kg over the 15 kg that airlines offer for free. The decision has impacted the revenues of most airlines.

 

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