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Lets Start!What do You understand by Hybrid Till Model related to Civil Aviation Tariff.

What is 5/20 Rules wrt Aviation in India? Analyse the changes being proposed in New Policy.

What are the Major Features of NCAP? Explain its possible impact on Indian Economy.

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National Civil Aviation PolicyInstructor: Harveer Singh

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VisionTo prepare the ground for 30-crore domestic ticketing by 2022 and 50 crore by 2027, besides targeting international ticketing at 20 crore.

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Objectives i) Ensure safe, secure and sustainable

aviation industry through use of technology and effective monitoring

ii) Enhance regional connectivity through fiscal support and infrastructure development.

iii) Enhance ease of doing business through deregulation, simplified procedures and e-governance

iv) Promote the entire aviation sector chain: cargo, MRO, general aviation, aerospace manufacturing and skill development.

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Regional Connectivity Scheme Cap of 2500 per flying hour to small town route. Currently around 75 out of 450 airstrips/airports

have scheduled operations. “demand driven” base Revival of the remaining

airstrips. grand plans to revive 50 airports in the next two years.

2-per cent cess on all domestic trunk route tickets as well as international tickets. the funds collected through the cess, which the

government expects to be Rs.1,500 crore a year, will be used to subsidise flights on small town routes (RCF)

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Route Dispersal Guidelines Uttarakhand and Himachal Pradesh included in Category II Category I to be rationalized based on a transparent

criteria, i.e., flying distance of more than 700km, average seat factor of

70% and above and annual traffic of 5 lakh passengers The percentage of Cat.I traffic to be deployed on CATIII will

be 35% of Cat-I. There view of routes will be done by MoCA once every5

years Withdrawal or revision of domestic operations to and

within North East Region etc, subject to full compliance of RDG, can be done under prior intimation to MoCA at least three months before withdrawal or revision of the service

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Bilateral Traffic Rights  GoI will enter into 'Open Sky' ASA on a reciprocal

basis with SAARC countries and countries located beyond 5000 km from Delhi

·For countries within 5000 km radius, where the Indian carriers have not utilised 80% of their capacity entitlements but foreign carriers /countries have utilised their bilateral rights, a method will be recommended by a Committee headed by Cabinet Secretary for the allotment of additional capacity entitlements.

Whenever designated carriers of India have utilised 80% their capacity entitlements, the same will be renegotiated in the usual manner.

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Ground Handling Policy The airport operator will ensure that there will be

three Ground Handling Agencies (GHA) including Air India's subsidiary/JV at all major airports as defined in AERA Act

At non-major airports, the airport operator to decide on the  number of ground handling agencies, based on the traffic output, airside and terminal building capacity

All domestic scheduled airline operators including helicopter operators will be free to carry out self-handling at all airports through their regular employees

Hiring of employees through manpower supplier or contract

workers will not be permitted for security reasons

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Airport PPP/AAI Encourage development of airports by AAI, 

State  Governments, the private sector or in PPP mode Future tariffs at all airports will be calculated on a

'hybrid till' basis, unless specified otherwise in concession agreements. 30% of non-aeronautical revenue will be used to cross- subsidise aeronautical charges.

Increase non-aeronautical revenue by better utilisation of commercial opportunities of city side land

AAI to be compensated in case a new greenfield airport is approved in future within a 150 km radius of an existing unsaturated operational AAI airport.

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Aviation Security, Immigration and customs MoCA will develop 'service delivery modules' for aviation

security, Immigration, Customs, quarantine officers etc in consultations with respective Ministries/Departments

·Allow Indian carriers to provide security services to other domestic airlines subject to approval of BCAS

Encourage use of private security agencies at airports for non- core security functions to be decided in consultation with MHA

Such agencies should be registered under the Private Security Agencies (Regulation) Act, 2005 and will also be separately accredited by BCAS

Subject to minimum benchmarks being met, security architecture at the different airports will be proportionate to the threat classification and traffic volume.

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Safety violations will be treated with zero-tolerance.

Directorate General of Civil Aviation (DGCA) will strive to create a single-window system for all aviation related transactions, queries and complaints.

The services rendered by DGCA will be fully automated by April 1, 2016.

DGCA will carry out a comprehensive review of all civil aviation requirements (CAR) once every 5 years starting from FY 2016-17.

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Maintenance, Repair and Overhaul The MRO business of Indian carriers is around Rs 5000

crore, 90% of which is currently spent  outside India.  In the budget for 2016-17, customs duty has been

rationalised and the procedure for clearance of goods simplified. Further incentives proposed in the policy to give a push to this sector:

MoCA will persuade State Governments to make VAT zero-rated on MRO activities

Provision for adequate land for MRO service providers will be made in all future airport/heliport projects where potential for such MRO services exists

Airport royalty and additional charges will not be levied on MRO service providers for a period of five years from the date of approval of the policy

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Aviation Education and Skill Building Estimated direct additional employment

requirement of the Civil Aviation Sector by 2025 is about 3.3 lakh . 

All training in non licensed category will conform to National Skill Qualification Framework standards. 

Support to the Aviation Sector Skill Council and other similar organisations/agencies for imparting skills for the growing aviation industry . 

There are nearly 8000 pilots holding CPL but who have not found any regular employment. MoCA will develop a scheme with budgetary support for Type- rating of Pilots.

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Aviation Tariff Tariff at all future airports will be

calculated on a 'hybrid till' basis. Thirty percent of non-aeronautical revenue will be used to cross-subsidise aeronautical charges.

Ministry of Civil Aviation and Ministry of Defence to ensure commercial aero-manufacturing is covered under defence off-set requirements.

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Code Sharing Agreement Indian carriers will be free to enter into code-

share agreements with foreign carriers for any destination within India on a reciprocal basis.

No prior approvals from MoCA will be required. Indian carriers simply need to inform MoCA 30 days prior to starting the code-share flights.

A review will be carried out after 5 years to consider the requirement of further liberalization in code-share agreements and to drop the requirement of reciprocity.

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Hybrid Till Model In the single till, all the earnings from both aeronautical

and non-aeronautical sources are added and then the charges are decided.

In double till, earnings from only aeronautical services are considered while deciding the rates.

Under the hybrid model, the airport operator adds a part of the non-aeronautical (duty-free shops, hotel, restaurant, among others) revenue and the total revenue from the aeronautical (landing, parking and ground handling charges) side to compile total earnings. The aeronautical rates are decided on the basis of total earnings. In the case of the airports in Delhi and Mumbai, 30 per cent of the non-aeronautical revenue is added in the total revenue.

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Currently the Hybrid Model is followed in Delhi and Mumbai. With this Policy, It would be extended to all the airports.

Global airlines body IATA expressed "concern" over the hybrid model for fixing charges at airports built under PPP model, saying it would make Indian airports more expensive and render tariff regulator "toothless"

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5/20 Rule Domestic Flying Credit (DFC): Available

Seat Kilometer (ASKM) deployed by the airline on domestic routes divided by 01 crore.

3 Suggestions for 5/20 Rules 5/20 Rule may continue as it is, OR ii) 5/20 Rule will be abolished with

immediate effect, 300 DFC for SAARC, 600 DFC for Global Ops.

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Final Policy Statement on 5/20.   All airlines can now commence international

operations provided that they deploy 20 aircraft or 20% of total capacity (in term of average number of seats on all departures put together), whichever is higher for domestic operations.

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Indian Aviation: Here and There there are as many as 125 Airports, which

include 11 International Airports. The Airports Authority of India (AAI) manages

all major airports throughout the country. Indian airlines carry nine times as many

passengers today as they did before deregulation in 1994. No-frills carriers, unheard of two decades ago, provide two-thirds of domestic capacity.

IndiGo, whose bulging order-book of 430 aircraft outweighs any other order in recent times.

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Currently India has 33 "non-operational" airports, according to the Airports Authority of India. Popularly dubbed “ghost airports”.

India to build 200 low-cost airports over the next 20 years

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Final Word The ICAO estimated that $100 spent on air

transport produce benefits worth $325 for the economy and 100 additional jobs in air transport result in 610 new economy wide jobs

4.5% of global GDP to the air transport component of civil aviation

Increasing disposable incomes, fall in prices of aircraft turbine fuel (ATF), increase in tourism, and visa reforms have placed India in a unique position. 

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A Big Thank You