The Telegraph
Since 1st March, 1999
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Fillip for new airports

New Delhi, May 20: The government is likely to relax the current norm of not allowing two airports within a radius of 150 km. If this happens, it will benefit metros like Delhi, Calcutta and Mumbai, which are planning to have a second airport.

Civil aviation secretary Ajay Prasad said at the chief secretaries conference today that the stringent norm was being reviewed in order to relax this restriction in the new civil aviation policy that would be announced soon.

Prasad made the disclosure in response to a question raised by a senior Haryana government official on whether the government had any plans to ease this norm in view of the “international experience” in this regard.

Prasad said the Centre was planning to set up three airports in the Northeast that would be able to handle 50-seater turbo prop planes. These airports would come up in Sikkim, Nagaland and Arunachal Pradesh.

The long-awaited civil aviation policy is likely to come up before the cabinet soon. Among other things, the policy envisages setting up an independent civil aviation regulator. The policy will also set the norms for mergers and acquisitions.

The policy also wants to retain the current ceiling on foreign direct investments, though the finance ministry wants it to raise the ceiling and allow foreign airlines to hold equity in domestic airlines.

The civil aviation regulator will set standards for the entire sector, issue licences to operators and personnel, regulate tariff, punish those who violate standards and ensure that there are no unfair trade practices and abuse of market dominance.

A comprehensive aviation law will be framed to replace the existing acts on aviation and security, which will legally establish the regulator.

The draft policy will also have a section on mergers and acquisitions in aviation, which will allow 100 per cent transfer of aircraft, flight rights and parking bays on payment of transfer fees.

It will, however, not allow, ‘grandfathering’ of these rights. This means these rights and slots cannot be on sold to another airline before or after the merger.

The civil aviation policy will, however, not push for relaxing FDI cap in domestic airlines.

The civil aviation ministry wants the current FDI cap of 40 per cent and ban on foreign airlines from owning stakes in domestic airlines to remain. However, the finance ministry, backed by the Planning Commission and the PMO, wants the Naresh Chandra committee recommendations of allowing foreign airlines to pick up limited stakes in local airlines to be accepted.

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