New Delhi: Foreign airlines may now be able to invest in domestic Indian carriers. That's if the Government approves the new aviation policy. The policy proposal will now go to the Cabinet for its approval.
There is a proposal for allowing 100 per cent FDI in aviation design and manufacturing. The new policy proposes to hive off AAI activities into subsidiaries to allow it to tap the equity market. The AAI employees will be given ESOPs in new subsidiaries.
Every airport will have at least two ground handling SVC providers and DGCA will regulate air navigation services. The government also plans to dismantle PSU hold on Jet fuel supply.
Jet fuel will be notified as declared goods. There is also a proposal to create an Essential Air Services Fund with cess on travel.
The opening of international routes to private carriers has been, however, pushed back to 2010. The government is planning to have a cargo hub at Nagpur. As a policy measure, cargo airlines from Nagpur will not have to pay any airport navigation charges for five years.
Spicejet Director, Ajay Singh has welcomed the proposed policy saying that while healthy competition is not a cause of concern, irrational competition is.
Managing Director of Air Deccan, GR Gopinath also welcomed the reforms and said this will lead to healthy competition.
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