Julian Moxon/PARIS Mehar Singh/DELHI

The Indian Government has released a draft civil aviation policy that promises to increase private sector involvement in the country's air transport industry, if the plan is approved.

Among the more important recommendations of the report are the creation of an autonomous civil aviation authority and the passing of a new Civil Aviation Act, replacing legislation in force since 1934.

The draft plan, which could be approved soon by the government, includes provision for private sector domestic carriers to operate on international routes. Jet Airways, the country's largest private airline, says that it wants to operate to Bangladesh, Nepal and Sri Lanka when the rules are relaxed.

While easing the ban on overseas services, the government has pledged that the traffic rights of state-owned Indian Airlines and Air India will be guaranteed for five years after privatisation. The government is pushing ahead with the delayed airlines sale, with Indian Airlines likely to be the first to come onto the market (Flight International, 1-6 February).

If enacted, the plan would continue the current limitations on foreign ownership of Indian carriers whereby a maximum of 40% can be held by overseas investors, although foreign airlines are prohibited from any equity stake.

Airports are also being encouraged to involve the private sector in their development. The draft says that the private sector "will be free to undertake construction and operation of new airports". Foreign equity of up to 74% will be approved automatically. With "special government permission", up to 100% will be permitted.

The government wants to hand over five of the largest airports - Delhi, Mumbai, Chennai, Bangalore and Calcutta - to private operators on long-term leases.

The prices of avgas (aviation kerosene) will also be "rationalised-to encourage major investment in feeder and regional air services by the private sector". This follows a recent initiative to reduce the tax on turboprop aviation fuel to promote regional air-transport development.

For the first time, international charters will be allowed to operate to all Indian airports with customs facilities. Denationalisation of Indian state-owned helicopter operators, principally Pawan Hans, is also envisaged, to encourage wider use of rotorcraft.

Source: Flight International