Aviation Sector

India’s aviation industry is largely untapped with huge growth opportunities, considering that air transport is still expensive for majority of the country’s population, of which nearly 40 per cent is the upwardly mobile middle class. RCS-UDAN scheme is an initiative in this regard.

Recent Developments

Progress of UDAN-1 and UDAN-2

  • The connectivity proposed under UDAN-1 has commenced and is stable. Currently, the focus on Ministry of Civil Aviation and Airports Authority of India is on expediting connectivity under UDAN-2.
  • Out of 21 proposals remaining valid under UDAN-1, operations have commenced on 20 proposals. Airlines are currently in the process of commencing operations on proposals awarded in UDAN-2 and a number of airport development and licensing activities have been completed.
  • Similarly, out of 46 Unserved Airports and 16 Underserved Airports awarded in UDAN-1 and UDAN-2, operations have commenced on 23 Unserved Airports and 15 Underserved Airports respectively.
  • Also, a number of destinations (such as Hubli, Gwalior, Allahabad etc.) which were only connected to one city through air connectivity earlier, are now connected to multiple destinations.

UDAN-3

  • Recently, the Ministry of Civil Aviation (MoCA) launched UDAN-3 Scheme, by integrating a number of iconic tourism sites in coordination with the Ministry of Tourism.

Disinvestment of Air India ‘Shelved’

Recently in November, 2018, Minister of Civil Aviation, shelved the government’s disinvestment plan in Air India for the time being as it is working on the revival of the debt-ridden enterprise. The strategic sale of the airline has been put on hold in the backdrop of Industry condition.

The government will consider all option only after the industry condition changes. Earlier, the Union government reportedly planned to initiate the strategic sale of the four subsidiaries of the airlines. The debt burden carrier has Rs 480 billion as debt by the end of March last year.

  • Key Features of UDAN 3 included: 1. Inclusion of Tourism Routes under UDAN 3 in coordination with the Ministry of Tourism 2. Inclusion of Seaplanes for connecting Water Aerodromes, and 3. Bringing in a number of routes in the North-East Region under the ambit of UDAN.
  • The government has approved flight operations on 13 water aerodrome routes under theUDAN-3 scheme. According to the MoCA, Islands in Andaman like Hut, Long and Car will be soon connected by seaplanes that can land on or take-off from the water.

Aviation Sector: Government Initiatives

(a) Regional Connectivity Scheme (RCS-UDAN)

  • Regional connectivity scheme of UDAN (Ude Desh ka Aam Nagrik) initiated by the government to connect unserved airports and unserved helipads across the country.

International UDAN

  • The Draft International Air Connectivity (IAC) proposes to extend affordable air travel programme UDAN to international circuits, with state governments identifying the routes for operation.
  • According to the draft scheme, state governments will identify the routes to be connected, and airline operators will assess demand on the identified routes and submit proposals for providing connectivity.
  • The scheme has also proposed to set up an International Air Connectivity Fund (IACF) -- a dedicated fund for providing subsidy support under the scheme. It will be created through the contributions of state governments.

(b) Construction of Greenfield Airports

  • Government of India (GoI), Ministry of Civil Aviation (MoCA) has granted ‘in principle’ approval for setting up of 18 Greenfield Airports in the country. The Government of Andhra Pradesh is to develop Greenfield airports in six cities.

(c) Nabh Nirman, 2018

  • NABH Nirman, was announced in 2018, which aimed to expand airport capacity by more than five times to handle a billion trips in a year. The expansion will be funded by leveraging the balance sheet of Airports Authority of India.

(d) Maintenance Repair and Overhaul Services

  • The tools and tool-kits used by the MRO have been exempted from Customs duty. The exemption shall be given on the basis of list the tools and tool kits certified by the Directorate General of Civil Aviation (DGCA) approved Quality Managers of aircraft maintenance organizations.
  • MROs were required to provide proof of their requirements of parts, or orders from their client airlines. The process for the clearance of the parts has been brought in line with that of the tool kits for a one time certification by DGCA approved Quality Managers in MRO's.
  • To enable economies of scale, the restriction of one year for utilization of duty free parts has been extended to three years.
  • To allow import of unserviceable parts including aircraft components like engines and landing gears by MROs for providing exchange / advance exchange, the concerned notification has been revised to enable advance export of serviceable parts.

(e) GAGAN (GPS Aided GEO Augmented Navigation)

  • GAGAN uses a system of ground stations to provide necessary augmentations to the GPS standard positioning service (SPS) navigation signal.
  • The GAGAN is designed to provide the additional accuracy, availability, and integrity necessary to enable users to rely on GPS for all phases of flight, from en route through approach for all qualified airports within the GAGAN service volume.
  • GAGAN will also provide the capability for increased accuracy in position reporting, allowing for more uniform and high-quality Air Traffic Management (ATM).
  • In addition, GAGAN will provide benefits beyond aviation to all modes of transportation, including maritime, highways, and railroads

National Civil Aviation Policy, 2016

Key Highlights

  • The centre-piece of the policy is to make regional air connectivity a reality.
  • The policy aims to take flying to the masses by making it affordable and convenient. Vision is to enhance ticketing from Rs. 8cr currently to Rs. 30 cr by 2022 and Rs. 50 cr by 2030.
  • NCAP aims to establish an integrated eco-system which will lead to significant growth of the civil aviation sector to promote tourism, employment and balanced regional growth.
  • Enhance regional connectivity through fiscal support and infrastructure development.
  • Enhance ease of doing business through deregulation, simplified procedures and e-governance.

Related Content