"There is a case for reviewing this policy as operation of airlines requires expertise as much as it does capital," the mid-term appraisal of the tenth plan said.
Noting that foreign direct investment in airlines had been raised to 49 per cent, the MTA document pointed out that foreign airlines "are still debarred from equity participation in domestic air transport operations".
On privatisation of Air India and Indian Airlines, it said, "A fresh exercise for restructuring" the two public sector carriers to make them competitive could be considered.
It pointed out that the process of divestment, which was undertaken "to improve the operational efficiency and financial performance" of the two public sector carriers, could not be completed as the qualified bidders withdrew due to several factors.
The divestment process could also not be resumed due to the unfavourable circumstances prevailing in the global aviation industry at that time, the MTA said.
Observing that the earlier policy on aviation had "stifled the growth" of the sector, the MTA said the past policy on landing rights "leaned heavily on Air India. However, since the airline lacked resources, this constricted the growth in capacity of traffic".
It suggested a review of the policy regarding provision of air services in the Northeast, Jammu and Kashmir, Andaman and Nicobar Islands and Lakshadweep, through the route dispersal guidelines.
"A more appropriate way to ensure reliable air services in these areas would be to provide direct subsidy through minimum subsidy bidding process", the document said.
The MTA also supported the recommendation of the high-powered Naresh Chandra committee that a statutory regulator for economic regulation and dispute resolution in airports should be considered.
It said the performance of regulatory agencies at India's international airports compared poorly with world standards due to procedures and unsatisfactory performance of agencies like customs and immigration.
"Steps need to be taken to streamline the procedures and improve efficiency", it said.
