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Draft Civil Aviation Policy not very helpful- KPMG

The new civil aviation policy, as reflected in the draft put out by the ministry of civil aviation, lacks details and is largely a ‘feel good’ document, consultant KPMG said. It will not be very helpful to the civil aviation sector in India, it added.

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“The draft civil aviation policy reads like a feel-good document, devoid of specific policy statements on burning issues like ATF taxes, MRO taxes, airport charges, general aviation etc,” said Amber Dubey, Partner and India Head of Aerospace and Defense, KPMG in India.

The civil aviation sector is facing various problems in India, including red-tape that prevents maintenance, repair and overhaul activities in India. Expectations from Modi government have been very high, but like in case of the budget, the new policy failed to put forward ‘big bang’ reforms that were being sought by experts and industry.

“There will be no ‘open skies’ in India and hence bilateral traffic will continue to be constrained by the ability of Indian carriers to deploy equal capacity. Air India will not be privatized and will now be guided by yet another ‘expert committee’ for its revival.

“The infamous 5/20 rule will continue for now. So will the Route Dispersal Guidelines (RDG). There’s no mention of the EASF that was supposed to fund loss making routes, as proposed by the government’s own Naresh Chandra Committee in 2003,” Dubey pointed out.

“The long-pending ANS corporatization is delayed further. No concrete policy measure to bring back the MRO revenue that India loses every day. The policy puts no pressure on DGCA to adhere to time limits for various clearances.

Overall, the draft civil aviation policy is not very helpful for the distressed aviation industry. Indian aviation will continue to struggle for relevance, policy support and profitability. The ministry may do well to read the dozens of policy suggestions that the industry has uploaded on the ministry’s website over the last three years” KPMG added.

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