Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

India has the potential to become the third largest aviation market by 2020 and the largest by 2030. There is large untapped potential for growth due to the fact that access to aviation is still a dream for nearly 99.5% of its population. This story captures the essence of all that is trending in this segment. 

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

Liberalized Drone Rules, 2021

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Draft Drone Rules, 2021

The central government has notified the Drone Rules 2021, a much more liberalised regime for unmanned aircraft systems than what existed previously.

Key features of Drone Rules 2021

These rules are built on a premise of trust, self-certification and non-intrusive monitoring. The policy is designed to usher in an era of super-normal growth while balancing safety and security considerations.

  • Several approvals abolished: Unique authorisation number, unique prototype identification number, certificate of manufacturing and airworthiness, certificate of conformance, certificate of maintenance, import clearance, acceptance of existing drones, operator permit, authorisation of R&D organisation, student remote pilot licence, remote pilot instructor authorisation, drone port authorisation etc.
  • Number of forms reduced: from 25 to 5.
  • Types of fees: reduced from 72 to 4.
  • Quantum of fee: reduced to nominal levels and delinked with size of drone. For instance, the fee for a remote pilot license fee has been reduced from INR 3000 (for large drone) to INR 100 for all categories of drones; and is valid for 10 years.
  • Digital sky platform: It shall be developed as a user-friendly single-window system. There will be minimal human interface and most permissions will be self-generated.
  • Interactive airspace map: with green, yellow and red zones shall be displayed on the digital sky platform within 30 days of publication of these rules.
  • No permission required in green zones: Green zone means the airspace upto a vertical distance of 400 feet or 120 metre that has not been designated as a red zone or yellow zone in the airspace map; and the airspace upto a vertical distance of 200 feet or 60 metre above the area located between a lateral distance of 8 and 12 kilometre from the perimeter of an operational airport.
  • De-licensing: No remote pilot licence required for micro drones (for non-commercial use) and nano drones. No requirement for security clearance before issuance of any registration or licence. Nano and model drones (made for research or recreation purposes) are exempt from type certification.
  • Foreign ownership: No restriction on foreign ownership in Indian drone companies.
  • Import: Import of drones to be regulated by DGFT. Requirement of import clearance from DGCA abolished.
  • Size of drones: Coverage of drones under Drone Rules, 2021 increased from 300 kg to 500 kg. This will cover drone taxis also.
  • Testing of drones: for issuance of Type Certificate to be carried out by Quality Council of India or authorised testing entities.
  • UID: Manufacturers and importers may generate their drones’ unique identification number on the digital sky platform through the self-certification route. Drones present in India on or before 30 Nov 2021 will be issued a unique identification number through the digital sky platform provided, they have a DAN, a GST-paid invoice and are part of the list of DGCA-approved drones.
  • Penalties: Maximum penalty for violations reduced to INR 1 lakh.
  • Permission: Safety and security features like ‘No permission – no takeoff’ (NPNT), real-time tracking beacon, geo-fencing etc. to be notified in future. A six-month lead time will be provided to the industry for compliance.
  • Drone corridors: will be developed for cargo deliveries.
  • Drone promotion council: to be set up by Government with participation from academia, startups and other stakeholders to facilitate a growth-oriented regulatory regime.

UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

AERA Bill, 2021

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : AERA Act

In the recent monsoon session, Parliament passed the Airports Economic Regulatory Authority of India (Amendment) Bill, 2021.

Key features of the AERA Bill, 2021

  • It seeks to amend the Airports Economic Regulatory Authority of India Act, 2008.
  • The 2008 Act established the Airport Economic Regulatory Authority (AERA).
  • AERA regulates tariffs and other charges (such as airport development fees) for aeronautical services rendered at major airports in India.
  • The 2008 Act designates an airport as a major airport if it has an annual passenger traffic of at least 35 lakh.
  • The central government may also designate any airport as a major airport by a notification.
  • The Bill adds that the central government may group airports and notify the group as a major airport.

Why has the definition of a major airport been amended?

  • The Amendment has changed the definition of a major airport to include “a group of airports” after the words “any other airport”.
  • The government hopes the move will encourage the development of smaller airports and make bidding for airports with less passenger traffic attractive.
  • It plans to club profitable airports with non-profitable ones and offer them as a package for development in public-private partnership mode to expand connectivity.

Was there a need to amend the AERA Act?

  • The Airports Authority of India (AAI) awarded six airports — Lucknow, Ahmedabad, Jaipur, Mangaluru, Thiruvananthapuram and Guwahati — for operations, management and development in public-private partnership mode in February 2019.
  • In 2020 too, the AAI has approved leasing of another six airports — Bhubaneswar, Varanasi, Amritsar, Raipur, Indore and Tiruchi.
  • The Ministry of Civil Aviation plans to club each of these airports with nearby smaller airports for joint development.
  • The move follows FM’s Budget Speech this year, in which she said the government planned to monetize airports in tier-2 and tier-3 cities.

UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

Draft Drone Rules, 2021

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Draft Drone Rules, 2021

The Ministry of Civil Aviation has released Draft Drone Rules, 2021, for public consultation. The rules will replace the Unmanned Aircraft System Rules, 2021.

Highlights of the Draft Drone Rules 2021

Number of forms: The rules propose to reduce the number of forms required for manufacturing, importing, testing, certifying and operating drones in India from 25 to six.

Abolishing authorization number: The draft seeks to abolish the unique authorisation number, unique prototype identification number, and certificate of conformance that were previously required for approval of drone flights.

Digital Sky Platform: Digital Sky, a platform launched by the government in December 2018, will become a single-window system for all approvals under the newly proposed rules.

Airspace map: An airspace map segregating the entire landmass of India into Green, Yellow and Red zones will be published on the platform within 30 days of notification of the new rules, the government said. The map will also be machine-readable through an Application Programming Interface (API) for easier plotting of drone flight paths.

Airport Perimeter: The draft rules reduced the airport perimeter from 45 km to 12 km. The rules state that no flight permissions would be required to fly up to 400 feet in green zones and up to 200 feet in the area between 8 and 12 km from the airport perimeter.

Drone corridors: The government will also publish a policy framework for Unmanned Aircraft System Traffic Management (UTM) within 60 days of notifying the rules. This will also include frameworks for developing “drone corridors” for the safe transfer of goods by drones.

Drone Promotion Council: The Rules also propose the setting up of a Drone Promotion Council, with the aim of facilitating a business-friendly regulatory regime for drones in India, the establishment of incubators for developing drone technologies and organizing competitive events to showcase drones and counter-drone solutions.

Others: To implement safety features such as “no permission, no take-off”, real-time tracking and geofencing, drone manufacturers, importers and operators will get six months’ time to comply from the date of notification of the rules.

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

What is Chicago Convention of 1944?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Chicago Convention of 1944

Mains level : NA

A private commercial flight was forced to make an emergency landing in Minsk by a MiG-29 fighter jet of Belarus.  The incident received considerable global attention.

How justified was Belarus in taking such a decision?

  • The answer lies at the junction of Belarus’s domestic laws as a sovereign country and international laws governing the action that states can legitimately take to deal with threats to security, real or perceived.
  • The issue of the use of military aircraft to neutralize potential threats posed by civilian aircraft acquired a different kind of urgency in the aftermath of terrorist attacks in the US on September 11, 2001.
  • Generally speaking, international law grants sovereignty to nations over their airspace as it does in territorial waters.

The Chicago Convention of 1944

  • The Convention on International Civil Aviation, better known as the Chicago Convention of 1944, to which Belarus is a signatory state, prohibits any unlawful intervention against a civilian aircraft.
  • At the same time, it has various provisions under Article 9 which permit a sovereign state the right to impose restrictions.
  • This includes enforced landings at a designated airport in its territory, in “exceptional circumstances or during a period of emergency, or in the interest of public safety”.
  • Once a flight has landed, Article 16 provides the host country the right to board/search the aircraft.
  • This is probably the clause that provided cover for the local authorities to board Mr. Morales’s aircraft in Austria in 2013.
  • But the Chicago Convention applies only to civilian aircraft of the contracting parties.

Other such laws

  • International law might also have to be examined in light of the International Air Services Transit Agreement (IASTA), also concluded in Chicago in 1944.
  • According to this agreement, contracting states grant to one another the freedom of air transit in respect of scheduled international air services, that is, the privilege to fly across territories without landing.
  • Belarus is not a signatory of IASTA.

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

[pib] Drone use permission for feasibility study of Covid-19 vaccine delivery

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 3- Drone use for covid vaccine delivery

Conditional drone use exemption for vaccine delivery

  • Ministry of Civil Aviation (MoCA) and Directorate General of Civil Aviation (DGCA) have granted conditional exemption to the Indian Council of Medical Research (ICMR).
  • The exemption is granted for conducting feasibility study of Covid-19 vaccine delivery using drones in collaboration with IIT Kanpur.
  • The permission exemption is valid for a period of one year or until further orders.

Entities using drone on conditional drone use exemption basis

  • Conditional drone use exemption has been granted to the below entities for said purposes:
  • Nagar Nigam of Dehradun, Haldwani, Haridwar & Rudrapur for preparation of GIS based property database & electronic tax register.
  • West Central Railway, (WCR) Kota for train accident site & maintaining safety & security of the railway assets.
  • West Central Railway, (WCR) Katni for train accident site & maintaining safety & security of the railway assets.
  • Vedanta Ltd. (Cairn Oil & Gas) also received the conditional drone usage exemption for data acquisition for asset inspecting & mapping.

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

India’s First Seaplane Project

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Seaplanes

Mains level : Seaplane connectivity in India

The first of the five seaplane services in Gujarat, connecting Sabarmati River in Ahmedabad to the Statue of Unity in Kevadia in Narmada district, will be inaugurated on October 31

India’s first seaplane

  • A seaplane is a fixed-winged aeroplane designed for taking off and landing on water. It offers the public the speed of an aeroplane with the utility of a boat.
  • The first seaplane project of the country is part of a directive of the Union Ministry of Civil Aviation.
  • As per the directive, the Airports Authority of India (AAI) requested state governments of Gujarat, Assam, Andhra Pradesh and Telangana and the administration of Andaman & Nicobar to propose potential locations for setting up water aerodromes to boost the tourism sector.

Where will the seaplane connect?

  • In Kevadia, the proposed Terminal will be spread over 0.51 acres in the premises of the Sardar Sarovar Narmada Nigam Ltd., located in the Panchmuli lake (Dyke 3) of the Sardar Sarovar Dam at Limdi village.
  • It is approximately 90 km from Vadodara, 150 km from Surat and 200 km from Ahmedabad — with an aerial distance of 74.6km from Vadodara airport.

What impact will it have on the environment?

  • The water aerodrome is not a listed project/activity in the Schedule to the Environmental Impact Assessment Notification, 2006 and its amendments.
  • However, the activities proposed under the water aerodrome project may have a similar type of impact as that of an airport.
  • There has to be a bathymetric and hydrographic survey by Inland Waterways Authority of India (IWAI).
  • During seaplane operations, there will be turbulence created in the water while takeoff and landing of seaplanes. This will lead to more operation process i.e. mixing of oxygen in the water.
  • This will have a positive impact on the aquatic ecosystem near seaplane operations increasing oxygen content and decreasing carbon content in this system.

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

Ensuring the take off of aviation industry

Note4Students

From UPSC perspective, the following things are important :

Prelims level : IATA

Mains level : Paper 3- Impact of corona pandemic on aviation industry.

Primarily the major driver of connectivity, the aviation industry is one of the worst affected industries in the corona crisis. It is in the need of relief package from the government. The article discusses the contribution of the industry in the economy. Finer details of the operation of the industry are also explained. In the end, details of the measures expected from the government relief package are discussed.

Significance of aviation industry in Indian economy

  • The air transport industry, including airlines and its supply chain, is estimated to contribute directly or indirectly $72 billion of GDP to India.
  • India being the fastest-growing domestic market in the world at 18.6 per cent per annum, followed by China at 11.6 per cent. (IATA report)

Impact of Covid-19 crisis

  • The same IATA report says that in India, 29.32 lakh jobs in the aviation sector are at risk.
  • Airlines in the Asia Pacific region may see the largest revenue drop.
  • The air transport business along with its supply chain may see a near wipeout of approximately 40 per cent of business volume in the current financial year.
  •  The two-month-long shutdown has eroded the capital of most airlines.
  • The cost of maintaining Aircraft on Ground (AoG) is extremely high, and with nil revenues, this is a sure-shot recipe for disaster.

Economics of running airlines profitably

  • You should be flying your entire fleet, with no Aircraft on Ground. (Airbus A-320 or similar)
  • Every plane must fly for 11 hours a day.
  • Which will be possible only if you have a turnaround time of 30-45 minutes.
  • And you have an average Passenger Load Factor (PLF) of around 65 to 67 per cent.

Now, consider this:

  • Forty per cent of your fleet is grounded.
  • Due to social distancing and other hygiene protocols, an aircraft can fly only eight hours because of the elongated turnaround time.
  • One-third seats are to be kept vacant.
  • And finally, you are flying with a reduced 50 per cent PLF.
  • The break-even ticket price in such a scenario would be astronomical.

Demand for  financial relief package

  • The Asia Pacific division of the IATA has corresponded with the Indian government, citing the case of some of the other nations which have announced financial relief packages for the sector.
  • As per reports, countries like Australia, New Zealand and Singapore, have announced relief packages for airlines.
  • FICCI has urged the government to immediately provide direct cash support to Indian carriers whereby the airlines can meet their fixed costs.

What relief measures could be provided?

  • First, a moratorium for the next 12 months on all interest on the principal amount of loans without limitations of size or turnover through a direction to all financial institutions.
  • Second, VAT on ATF by state governments, which ranges from 0-30 per cent, should be rationalised with immediate effect to a maximum of 4 per cent across all states for the next six months.
  • Third, aviation turbine fuel needs to be brought under the ambit of 12 per cent GST, with full input tax credit on all goods and services.
  • Fourth, a waiver for private airport operators space rentals and AAI, royalty, landing, parking, route navigation and route terminal changes for the next one year.
  • This should be done not only for the airlines but all aviation-related businesses.
  • Fifth, all airlines and aviation-related business must be treated as priority sector lending.
  • Sixth, no loans to airlines and other aviation-related business should be classified as NPAs and no collateral enforced or enhanced during this moratorium.
  • Finally, support the airlines and other-aviation related companies by paying or taking care of salaries of the employees for a period of six months.
  • This will allow employee retention and is being done in a lot of countries.

A question was asked by the UPSC in 2017 related to the development of Airports in India under PPP model. This shows the importance of the aviation sector from UPSC point of view. Consider the question asked by the UPSC “Examine the development of Airports in India through joint ventures under PPP model. What are the challenges faced by the authorities in this regard?”

Conclusion

Recovery from this crisis is going to be a long and uphill task. It will take effort, planning and, most importantly, coordination between the aviation industry and the government.


Back2Basic: IATA-International Air Transport Association

  • IATA was founded in Havana, Cuba, on 19 April 1945.
  • It is the prime vehicle for inter-airline cooperation in promoting safe, reliable, secure and economical air services – for the benefit of the world’s consumers.
  • The international scheduled air transport industry is more than 100 times larger than it was in 1945.
  • Few industries can match the dynamism of that growth, which would have been much less spectacular without the standards, practices and procedures developed within IATA.

 

 

 

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

GARUD portal for fast-track approval to COVID-19 related drone operations

Note4Students

From UPSC perspective, the following things are important :

Prelims level : GARUD Portal

Mains level : Not Much

Civil Aviation Ministry and DGCA have launched the GARUD (portal for providing fast track conditional exemptions to government agencies for COVID-19 related drone operations.

Possible prelim question:

The Garud Portal which sometimes finds mention in the news is related to-

a) Air travel of defence personnel

b) Airlifting of the stranded Indian citizens

c) Registration of Remotely-piloted aircraft system (RPAS)

d) None of these

GARUD portal

  • GARUD is an acronym for ‘Government Authorisation for Relief Using Drones’.
  • The objective of the portal is to assist governmental entities in seeking exemption for COVID-19 related Remotely-piloted aircraft system (RPAS) operations.
  • The Civil Aviation Ministry has clarified that any violation of provisions will make the conditional exemption null and void and will lead to penal action.

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

Drone Census

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Drone Census, Drone Categorization

Mains level : Regulation of drones in India

India’s first drone census has seen only 2,500 Ownership Acknowledgment Numbers (OANs) being issued by the Ministry of Civil Aviation (MoCA) since five days of beginning.

Drone Census

  • The MoCA had issued a notice providing a one-time opportunity for voluntary disclosure of all drones and operators starting from January 14.
  • The DGCA issued the Civil Aviation Requirements (CAR), Section 3 – Air Transport Series X, Part I, Issue I, dated August 27, 2018 regulates use of drones.
  • It provides the process for obtaining Unique Identification Number, Unmanned Aircraft Operator Permit (UAOP) and other operational requirements; there are drones that do not comply with the CAR.
  • If a drone is not enlisted by 5 p.m. on January 31, then it will most definitely be confiscated.
  • After January 31, only authorised retailers will be allowed to sell them after uploading buyers’ Know your Customer (KYC) and sale invoice, similar to the sale of mobile phones and cars.

Why such move?

  • The exercise will give the government a picture of who owns what kind of drone in which part of the country.
  • It will help in making policy decisions that should ideally become the base for understanding the scale of operations.

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

Regulations for flying of Drones  

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Categorisation of Drones

Mains level : Security issues associated with flying of drones

  • Two US citizens were detained for flying a drone fitted with a camera above the high-security zone in Lutyens’s Delhi.
  • While this prohibition follows a specific security threat from terrorists, the general guidelines issued by the civil aviation regulator DGCA also lay down specific no-go areas for drones.

Types of drones

  • DGCA has identified multiple categories of drones, which can be broadly classified as ‘Nano’ (weighing up to 250 g), ‘Micro’ (more than 250 g but less than 2 kg) and ‘Small and above’ (weighing 2 kg or more).
  • Every drone that is bigger than a ‘Nano’ must obtain a unique identification number (UIN) from the aviation regulator (similar to the registration number for a car).
  • This number must be displayed on the remotely piloted aircraft. A UIN will be issued once, against a fee of Rs 1,000, and will not be issued to a foreign citizen or entity.
  • Users of bigger drones will be required to obtain a Unique Air Operator’s Permit (UAOP), similar to a driver’s licence.
  • The UIN and UAOP can be obtained from the online platform Digital Sky. The permits will be issued in less than a week.

Flying conditions

  • All drones other than those in the ‘Nano’ category must meet mandatory equipment requirements such as GPS, anti-collision light, ID plate, RFID and SIM facilities with software that ensures ‘no-permission, no-takeoff’, among other features.
  • Before flying a ‘Small’ or bigger drone, an operator has to file a flight plan, and inform the local police, so that the machine can reach a height of 400 ft or more, and use both controlled and uncontrolled airspace.
  • ‘Micro’ drones will be required to submit a flight plan only if using controlled airspace; the operator must, however, inform the local police in all cases.
  • Many drones used for amateur photography fall in this category. These aircraft will need a UIN but no UAOP, and will be allowed to climb only to a height of 200 ft.
  • ‘Nano’ drones will be able to operate freely, without any registration or permit, but their operations will be restricted to 50 ft above the ground, and to uncontrolled airspaces and enclosed premises.
  • All those requiring a UAOP must undertake a five-day training programme that will expose them to regulations, basic principles of flight, air traffic control procedures, weather and meteorology etc.
  • These operators will also have to take written tests and flight simulator tests before they are issued permits.

Only during day

  • All categories of drones must be flown in the visual line of sight, and only during daytime.
  • While all drone operations are restricted to daylight hours, photography using drones is allowed in well-lit enclosed premises.
  • But it would still be mandatory to inform the local police before flying.

No-fly zones

  • The regulator listed 12 categories of “no-drone zones”.
  • These include the area up to 5 km from the perimeters of the high-traffic airports of Mumbai, Delhi, Chennai, Kolkata, Bengaluru and Hyderabad.
  • For other airports, the no-drone zone extends up to 3 km.
  • Drones cannot fly closer than 25 km of international borders, including the Line of Control and Line of Actual Control.
  • The area within a 5-km radius of New Delhi’s Vijay Chowk is a no-drone zone; this, however, is subject to any additional conditions/restrictions that local law enforcement agencies.
  • A drone can’t be flown within 2 km from the perimeter of strategic locations and vital installations notified by the Ministry of Home Affairs, unless cleared by the Ministry.

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

[op-ed snap] Giving wings to better air connectivity

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Civil Aviation sector India - challenges and way ahead

CONTEXT

Very few States in India have active civil aviation departments. Currently, the penetration of the aviation market in India stands at 7%. There is potential to be among the global top three nations in terms of domestic and international passenger traffic.

The passive role of states

  1. Civil aviation is a Central subject and barely got significant attention from the States.
  2. States had a passive role as the Central government continued the development of airports and enhancing air connectivity. 

The increasing role of states

  1. The cooperation of States is seen as a major factor in the growth of the civil aviation sector. 
  2. Regional Connectivity Scheme, UdeDeshkaAamNaagrik (UDAN) has a built-in mechanism to develop stakes of State governments in the growth of the sector.
  3. Thirty states and Union Territories have already signed memoranda of understanding with the Central government. 
  4. The policies of States and Centre are now being interlinked to make flying accessible and affordable. 

Fuel pricing

  1. For any airline in India, the cost of Aviation Turbine Fuel (ATF) forms about 40% of the total operational cost. 
  2. Keeping petroleum products out of GST may be imperative for State governments. 
  3. States have very high rates of VAT on ATF, as high as 25% which has dampened the growth trajectory of civil aviation. 
  4. Any notional revenue loss can be offset by enhanced economic activities as a result of increased air connectivity to the region. 
  5. An International Civil Aviation Organization (ICAO) study has shown that the output multiplier and employment multiplier of civil aviation are 3.25 and 6.10, respectively. 
  6. UDAN has motivated State governments to reduce the VAT on ATF to 1% for the flights operated under this scheme. 
  7. Airports such as Jharsuguda (Odisha) and Kolhapur (Maharashtra) have successfully attracted airlines to connect these hitherto unconnected regions. 

Airport development

  1. There are many regional airports which can be developed by States on their own or in collaboration with the Airports Authority of India (AAI). 
  2. Different models of public-private-partnership can be leveraged to develop infrastructures. 
  3. Innovative models can be explored to create viable ‘no-frill airports’
  4. India had about 70 airports since Independence until recently. Under UDAN, the Union government has operationalised 24 unserved airports over the past two years; 100 more are to be developed in the next five years.

Linking the hinterland

  1. States and the Central government can play a crucial role in supporting airlines to develop air services in remote regions
  2. To reduce the operational cost of airlines and airport operators, incentives from State governments such as financial support such as VAT reduction; sharing of viability gap funding with airlines, and non-financial incentives such as providing security and fire services free of cost to airport operators can be considered.
  3. Union government has declared concessions on excise duty on ATF and made budgetary allocations for airport development. This has encouraged airlines to operate on regional unconnected routes instead of trunk routes. 

Way ahead

To attract airlines from regional to remote connectivity, further interventions are necessary. 

  1. Considering the infrastructural constraints and difficult terrain, small aircraft operators need to be encouraged.
  2. Areas which cannot be connected meaningfully by road or rail have to be linked by air. 
  3. Air connectivity would not only bring down travel time but also be a boon in emergencies.
  4. This is also true for northeast India, the islands and also the hilly States.
  5. States may converge their relevant schemes relating to tourism, health, and insurance for supporting air connectivity to supplement the objectives of regional connectivity.

States need to create a conducive business environment to facilitate the aviation sector. Developing airports, incentivising airlines and pooling resources of both the Union and State governments can accelerate the growth of the sector.

back2basics

The no-frill airports terminals will be without the expensive glass and steel, with fancy lounges, centralised air conditioning, aerobridges, conveyor belts as well as escalators and elevators for the passengers.

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

Airports Economic Regulatory Authority of India (AERA)

Note4Students

From UPSC perspective, the following things are important :

Prelims level : AERA

Mains level : Read the attached story

  • The Rajya Sabha has passed a Bill allowing the Airports Economic Regulatory Authority of India (AERA) to bid out any new airport at a pre-determined tariff structure.
  • The AERA (Amendment) Bill was approved by the Cabinet in December 2017.

About AERA

  • AERA is a regulator that has the powers to set the tariffs charged at airports.
  • Sixteen airports will be under the jurisdiction of AERA.
  • All the other airports which would not be major airports will continue to be looked after by the Ministry of Civil Aviation and the Govt. of India.
  • Currently, all major airports with an annual capacity of handling 1.5 million passengers come under the purview of AERA.

Promises of the amendment

  • At present the passenger throughput at the airports under Airport Authority of India (AAI) is in the vicinity of 344.69 million.
  • So the limited purpose of this amendment is to substitute the figure 1.5 million which defined a major airport, which reflected 1.3 per cent of the passenger traffic at that point of time, by the figure 3.5 million.
  • This accurately reflects the state of traffic today and maintains proportionality.
  • If the amendment if effected, the definition of major airports will change to any aerodrome which has or is designated to have an annual passenger capacity of 3.5 million.

Why such bill?

  • The number of airports which are carrying high traffic has increased considerably and the government is hoping to ease the cumbersome process of fixing tariffs which the regulator had to undertake every five years.
  • With the advent of privatization and increasing number of airports being privatized, the Airports Authority shall not determine the tariff or tariff structures in the case such airports.
  • This is so because the tariff structure is part of the bid which is offered at the time of privatization.

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

[op-ed snap] Hard landing: Jet Airways’ temporary halt

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Need for policy intervention in air transport.

CONTEXT

Jet Airways announced a temporary halt of its operations from Wednesday night as funds to keep the airline going dried up.

Background

  • To the long line of private airline carcasses dotting the bleak landscape of Indian aviation, one more may soon be added.
  • Jet Airways announced a temporary halt of its operations from Wednesday night as funds to keep the airline going dried up.
  • Despite intense lobbying by the bankrupt airline, banks stood firm on their decision to not release emergency funds to sustain operations until a white knight is found.
  • With operations halted and the half a dozen or so planes that were flying till Wednesday grounded, the airline is staring down the barrel, especially because most of its prized departure slots at major airports across the country have either already been or will soon be allocated to other airlines.

Future prospects

  • Jet will be able to regain these slots only if it bounces back before the end of the summer schedule in October.
  • Whether that will happen is now in the hands of prospective buyers, who are said to have evinced interest in buying the airline during the Expression of Interest (EOI) process called by banks last week.
  • The fact that the banks refused to extend emergency support is probably an indicator of the quantity and quality of the EOIs received by them.
  • It is hard to believe that they would not have temporarily supported Jet if the EOIs had been serious.
  • In sum, it does appear at this point that a miracle will be needed for Jet to take wing again.

Reasons for such instances

  • The collapse of Jet has caused turbulence in the market and also raised some serious questions over why the domestic airline industry is proving to be so perilous for enterprises.
  • There have been more than half-a-dozen private airline companies that have fallen by the wayside in the last decade and more, and it is well-known how Air India is propped up with government support.
  • Reckless competition – While it is true that fuel costs, which account for about half of the expenses of running an airline, have been difficult to manage, the fact is that reckless competition is responsible for the sorry plight of the industry.
  • Low Margins – Margins in the airline industry are wafer-thin in the best of times and the combined effect of rising fuel prices and the inability to pass them on to consumers due to competition has proved to be a deadly cocktail.
  • Similar instances – In the race to the bottom, it was Kingfisher seven years ago, Air Deccan and Air Sahara before that, it is Jet now, and who knows which airline could be next. It is notable that airfares have largely stayed stable over several years, benefiting passengers but biting airlines.

Way Forward

  • Stopping undercutting – It is time that airlines took stock of their collective plight and stopped undercutting each other on fares.
  • Centre’s support – The Centre can help too by reviewing fuel taxes and surcharges apart from airport levies, which the airlines complain are too high.
  • After all, a healthy airline industry can only be good for government revenues over the long term.

 

 

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

International Air Transport Association (IATA)

Note4students

Mains Paper 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

From the UPSC perspective, the following things are important:

Prelims level: IATA

Mains level:  Potential of the aviation sector in India


News

  • SpiceJet has joined global airlines’ grouping International Air Transport Association (IATA) as a member, becoming the first Indian low-cost carrier to get the membership.

About IATA

  • The International Air Transport Association is a trade association of the world’s airlines.
  • IATA supports airline activity and helps formulate industry policy and standards.
  • It is headquartered in Montreal, Quebec, Canada with Executive Offices in Geneva, Switzerland.
  • Consisting of 290 airlines, primarily major carriers, representing 117 countries, the IATA’s member airlines account for carrying approximately 82% of total available air traffic.

Benefits of joining IATA

  • The IATA represents more than 290 airlines, including Air India, Jet Airways and Vistara.
  • SpiceJet is the first Indian low-cost carrier to be an IATA member, and fifth member in India.
  • The IATA membership is significant for rapidly expanding the airline’s international footprint.
  • The membership allows the airline to explore and grow its collaborations with international member airlines of IATA through interlining and code shares.
  • This in turn enables an airline to seamlessly expand the network options for its passengers in future.
  • The membership will further enable us to inculcate global best practices and innovations.

Civil Aviation Sector – CA Policy 2016, UDAN, Open Skies, etc.

Ministry of Civil Aviation releases Vision 2040 document

Note4students

Mains Paper 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

From the UPSC perspective, the following things are important:

Prelims level: Aviation related stats

Mains level: The potential of the aviation sector and dealing with various issues associated with it


News

  • The Ministry of Civil Aviation has unveiled the Vision 2040 document, which highlights the growth potential in different sub-sectors of Indian aviation and the key action steps are required to be taken to achieve the desired objective.

Highlights of Vision 2040

  1. As per the document the total passenger traffic (to, from and within India) in India is expected to rise nearly six-fold from 187 million in FY 2018 to around 1124 million in FY 2040.
  2. This includes around 821 million domestic passengers and around 303 million international passengers (to and from India).
  3. The overall CAGR (compound annual growth rate) works out to around 9% in domestic and 7% in international traffic during FY 2018-2040.

Why such long-term plan?

  1. Rather than having five-year plans, the document talks about India having a robust 20-year plan that lays out the targets and the path to get there along with time lines and clear accountability.
  2. Since aviation is a longterm plan, aircraft procurement, airport development, air navigation system changes and skill development should be done in a cohesive manner.
  3. It said technology developments like artificial intelligence, machine learning, blockchain, composites, super-alloys, biofuels etc. are changing the face of aviation.
  4. It is humanly impossible to predict the oil price or the exchange rate a month down the line, much less the impact of technology 10 years hence.

A high growth path

  1. Total passenger traffic to, from and within India, during Apr-Nov 2018 grew by around 15% year on year as compared to around 6% globally.
  2. India is now the seventh largest aviation market with 187 million passengers (to, from and within India)inFY2017-18.
  3. It is expected to be third largest by 2022.

Various Initiatives

  1. As per the document initiatives like Nabh Nirman (for airport capacity augmentation), Digi Yatra (for paperless travel) and AirSewa (for online passenger grievance redressal) are bringing in radical changes.

Policy Suggestions

  1. It said that the government may consider establishing a Nabh Nirman Fund (NNF) with a starting corpus of around $2 billion to support low traffic airports in their initial phases.
  2. The tax structure for Aviation Turbine Fuel (ATF), Maintenance, Repair and Overhaul (MRO) and aircraft leasing may be gradually aligned with leading global jurisdictions.
  3. The concept of land pooling may be used to keep land acquisition costs low and to provide landowners with high value developed plots in the vicinity of the airport.
  4. It also said DGCA may be converted into a fully-independent Civil Aviation Authority, with its own sources of funding and freedom to recruit professionals at market-linked salaries.
  5. Most transactions with DGCA will be automated with minimal human interface.
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