Cabinet bids adieu to 5/20 aviation rule with new aviation policy; airfares to go cheaper

The Union Cabinet has cleared a new civil aviation policy, and the changes introduced would allow carriers to fly abroad, promote regional connectivity and boost cargo operations, while removing the proposal that sought a payment of Rs 8,000 per flight from airlines so that the regional connectivity scheme could be funded. The cabinet has said that this rate will keep on changing from time to time.

As of now, the details of these changes are awaited but as per sources, the 5/20 rule, which allows an to fly internationally only when it has served in India for 5 years and has 20 aircrafts in its fleet, has been done away with. Not only this, the new policy would also provide subsidize fares for regional routes.

ET sources said that the Civil Aviation Ministry had sent the proposed policy to Cabinet for approval on June 3. "Airfares for regional routes to be capped at Rs 2,500/hour. Government to subsidise fares beyond Rs 2500/hr on regional routes," they claimed.

The new policy aims to support the domestic aviation sector and tap its high growth potential by providing encouraging options like capping airfares at Rs 2,500 for a one-hour flight, auctioning of unilateral traffic rights, tax incentives for airlines, maintenance and repair works of aircraft besides mooting 2% levy on all air tickets so that regional connectivity scheme can be funded.

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