Lok Sabha Question No. 1936 (UNSTARRED), answered on 2015-12-10
Subject: Policy on Domestic and Overseas Flying
Ministry: CIVIL AVIATION
Asked by: RAKSHA NIKHIL KHADSE

## GOVERNMENT OF INDIA MINISTRY OF CIVIL AVIATION LOK SABHA

UNSTARRED QUESTION NO. : 1936 (To be answered on the 10 th  December 2015)

## POLICY ON DOMESTIC AND OVERSEAS FLYING

1936. SHRIMATI RAKSHATAI KHADSE

Will the Minister of CIVIL AVIATION

## ANSWER

Minister of State in the Ministry of CIVIL AVIATION

(Dr Mahesh Sharma)

- a) The extant policy on  regional connectivity, Air cargo and Maintenance Repair and Overhaul services is as follows-
- i) Regional Connectivity Scheme : With a view to provide remote and regional air connectivity, the Government had issued Route Dispersal Guidelines (RDG) in 1994, requiring all airlines to deploy capacity in remote and regional areas/air routes.

According to the RDGs, an airline is required to deploy 10% of its capacity deployed on 12 Category 1 routes on Category 2 routes, i.e. routes  to  J&K,  North  East,  Andaman  &  Nicobar  Islands  and Lakshadweep. In addition, an airline is required to deploy 10% of the capacity so deployed on Category 2A routes, which are the routes connecting airports within Category 2.  An airline is also required to deploy at least 50% of the capacity deployed on Category 1 routes on any routes connecting airports within rest of the country, i.e. Category 3

be pleased to state:-

- a) the extant policy of the Government on domestic and overseas flying in respect of regional connectivity, air cargo promotions and maintenance
2. and repairs;
- b) whether the Government proposes to revise the said policy;
- c) if so, the details thereof;
- d) whether the Government also proposes to frame up new norms or amend the existing norms for the local private airlines for domestic and overseas flying; and
- e) if so, the details thereof?

routes.   Further, with a view to expand air services to tier II and III cities, a separate category of air operator permit was introduced, i.e. Regional Scheduled Airlines. These airlines perform operation of flights within four geographical regions namely North, South, West and East including North Eastern region. (ii) Air Cargo Promotion - To promote cargo, the existing instructions are open sky policy for foreign cargo airlines entering India, allowing FDI upto 74% in cargo sector, low cargo handling charges at most of the AAI airports, etc. Besides, Ministry of Civil Aviation being the nodal Ministry for  Air  Cargo  Industry  has  set  up  an  Inter-Ministerial  Air  Cargo Logistics  Promotion  Board  with  the  members  from  various Ministries/Departments/Organizations to discuss various cargo related issues. (iii)  Maintenance,  Repair  &  Overhaul  :  MROs  are  maintenance organizations approved by DGCA to perform the required maintenance of aircraft and aircraft engines/parts.At present, these organizations are regulated under Civil Aviation Requirements 145, which are based on international standards and are amended from time to time in line with international best practices.

- b) & c) The major recommendations in the draft Civil Aviation Policy are-
- i)  Regional Connectivity Scheme (RCS) -  To target an all-inclusive airfare not exceeding Rs 2500 per passenger, indexed to inflation for a

one-hour flight on RCS routes. ii)  Maintenance  Repair  and  Overhaul  Services(MRO)  -  The  fiscal incentives being provided are that service tax on output services of MRO will be zero-rated and the tools and tool-kits used by the MRO will be exempt from Customs duty. iii) Cargo Operations- Air cargo will be accorded 'infrastructure' status if co-located with an airport and will be eligible for Sec 80IA benefits.

d)&(e)  The  draft  Policy  (which  is  on  Ministry's  website)  aims  at amending the norms for domestic and overseas flying by providing clarity under the Route Dispersal Guidelines (RDG)  and liberalising code share agreements and bilateral traffic rights. Regarding the 5/20 rule, three options have been given.

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