Revised draft aviation policy to boost air traffic in State

It provides several concessions to airlines operating to airports under the Regional Connectivity Scheme

October 31, 2015 12:00 am | Updated 05:48 am IST - VISAKHAPATNAM:

The growth and development of airstrips like the one at Kadapa and the proposed ones at Kuppam and Oravakal in Andhra Pradesh will get a boost with several initiatives for regional airports announced in the Revised Draft National Civil Aviation Policy (NCAP), released by Civil Aviation Minister Ashok Gajapathi Raju in New Delhi on Friday.

The revised policy will also benefit regional airline operators like Air Costa to fly to more destinations and increase their occupancy. It would also provide better air connectivity within the State.

It may be recalled that Chief Minister N. Chandrababu Naidu had already approved AP Civil Aviation Policy in June this year. The State government had announced lower VAT on Aviation Turbine Fuel (ATF), stamp duty exemption, re-imbursement of property tax for Aircraft MRO (Maintenance, Repair and Overhaul) facility.

The revised draft policy provides several concessions to airlines operating to airports under the Regional Connectivity Scheme (RCS). This can be a boon to airports in Andhra Pradesh to increase traffic and provide regional connectivity within the State. The RCS scheme, to come into effect from April 1, 2016, recommends airfare of about Rs.2,500 for a one-hour flight in RCS.

No-frills airports

Only 75 out of 476 airstrips/airports in the country have scheduled operations and policy plans to revive the viable unused/under used airstrips. It also advocates building of no-frills airports at a cost of Rs.50 crore. The Viability Gap Funding (VGF) for scheduled commuter airlines can see increased operation of flights in the RCS region.

Regional Connectivity Fund (RCF) would be created for VGF.

The State government would provide land free of cost and multimodal hinterland connectivity, power, water and other utilities at concessional rates and VAT on ATF 1 per cent less in RCS airports.

The Centre on its part would exempt service tax on tickets under RCS. The Scheduled Commuter Airlines (SCA s) operated from RCS airports would be exempted from excise duty, SCA can enter into code share with other airlines and they would be exempted from payment of airport charges under RCS.

The proposal to ensure at least three Ground Handling Agencies (GHAs) including Air India’s subsidiary/joint venture at an airport would prevent monopoly and increased costs to passengers. Domestic airlines and charter operators would be free to carry out self-handling themselves or through their subsidiaries or to outsource the same to other airlines or to a GHA. This would help the airline operators to reduce their overhead costs and improve efficiency.

It provides several concessions to airlines operating to airports under the Regional Connectivity Scheme

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