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Draft civil aviation policy promises sweeping reforms

The Indian government today pledged to introduce sweeping reforms in the civil aviation sector to attract private and foreign equity.

Releasing a new civil aviation policy draft, senior officials said the new policy was aimed at ending the current regime of state controls and guarantee a "conducive competitive framework and encourage private airlines and privately-run airports."

The draft, however, does not say anything about the ban on foreign airlines investing in joint ventures with domestic carriers.

"The private sector will be allowed to invest in the construction, upgradation and operation of new and existing airports and cargo-related infrastructure," the officials said.

Foreign equity in the Indian aviation infrastructure would be also permitted.

"Up to 74 per cent will be allowed with automatic approval and 100 per cent with special permission of the government," the ministry officials said, citing the draft legislation.

"The government will also reduce its equity in all organisations such as the Indian Airlines, Air India and Pawan Hans Helicopter Corp.," they said.

If made into law without changes the new policy would set up an autonomous agency which would offer "a level-playing field" and guarantee that "there are no unfair trade practices" through existing policies on state protectionism.

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