New India Civil Aviation Policy: Open skies, passenger friendly rules and more

The Ministry of Civil Aviation (MOCA) will be announcing the draft of the new civil aviation policy in the coming weeks. The last draft policy in 2015 didn't come to fruition, for many reasons and oppositions. Much has changed since then. I attended the India Aviation 2016 show in Hyderabad earlier this year, and there were a lot of discussions and promises around customer experience, greater connectivity and skill development, as part of the new 2016 policy. Here we take a look at some of the changes expected in the new policy.

The 5/20 rule will likely go away

There's a current rule that only airlines that have at least 5 years' domestic operational history and 20 aircraft, are allowed to fly international routes. This has been challenged by the newer players like Air Asia and Air Vistara, while existing players see it as unfair to remove these rules (after all, they had to go endure these rules at the time).

The proposal seems to be to do away with the 5-year requirement. However, the new rules will require airlines to allocate 20 aircraft or 20% of their total fleet of aircraft, whichever is higher, to the domestic sector if they wish to fly overseas. The idea here is that India isn't used exclusively as a hub for overseas operations (Air Asia Malaysia and Singapore Airlines have significant stakes in Air Asia India and Vistara).

Open skies and unlimited flights - with a caveat

If the new rules are implemented, one could see unlimited civilian flights to and from outside India. However, there's a caveat - unlimited flights will only be allowed for routes that are over 5,000 kms (roughly 3100 miles) or 7 hours' flying time, or more, from India. 

Courtesy: The Hindu Business Line

Air India and Jet Airways are the Indian players with aircraft capable of such long-haul operations. Most European and American carriers will also benefit from this rule. On the other hand, airlines from the Middle East and Far East will be miffed with this proposal, because they're within the proposed 5000 km / 7 hours range.

To be clear, the open skies rule may not necessarily find its way into the Civil Aviation Policy, but instead, come in as a later proposal / rule.

Price cap on short routes

In a bid to increase the number of fliers, as also to operationalise and monetise the investment in several small airports, there could be a price cap on short routes. The 2015 policy spoke about a possible cap on the fare, of Rs 2,500 per hour on such routes. (Though in reality, many routes in India that are within the 1 to 3 hours flying duration, already cost less than Rs 2,500 per hour).

Passenger compensation for delays and denial of boarding

Airlines often overbook their flights on the basis that there will be some cancellations. This could affect fliers with confirmed plans, who are denied boarding, in a situation where there are more passengers for a flight, than seats on the plane. There currently isn't a structured compensation mechanism for such denials. The new policy will likely formalise a compensation, expected to be the cost of a new ticket (last minute tickets can be expensive) or double the original ticket price, whichever is less. This is somewhat similar to SpiceJet's Fly for Sure add-on service, though they currently charge for this benefit.

Similarly, compensation for delays may now be addressed through the policy, with long delays being compensated at up to 400% of the ticket price. I believe there will be a formula to determine the amount of compensation, for delays beyond a specified duration.

More about the new civil aviation policy will be known in the coming weeks, and we hope to keep you readers updated on developments. 

And we'd also like to know what you might want to see in the new policy. Now, naturally this is not something any of us individually (or even collectively) can influence, but it is good to know what the typical flier's expectations are! Do leave thoughts in the comments section below.