2015 was a mixed bag for airlines in India

All eyes on new civil aviation policy announcement
The civil aviation policy could soon see the light of day, but all eyes would be on how it would deal with the demand for scrapping the controversial 5/20 Rule that makes a domestic airline to complete five years of operations, while having a fleet of as few as 20 aircraft to start international operations.

An airline bounced back from near death, three others started flying, and a low-cost carrier got listed in bourses, bringing cheers to the civil aviation sector this year. But unveiling of a national policy that could propel reforms remained a work in progress.

The civil aviation policy could soon see the light of day, but all eyes would be on how it would deal with the demand for scrapping the controversial 5/20 Rule that makes a domestic airline to complete five years of operations, while having a fleet of as few as 20 aircraft to start international operations.
While there is the promise of a business-friendly policy in early 2016 with tax sops, fliers will have to spend more on tickets due to the introduction of a 2 per cent cess to fund the government’s regional connectivity plans. SpiceJet, which was on the verge of closure due to financial problems last year, sprang back to business with the entry of its original promoter Ajay Singh, while Vistara, a joint venture of the Tatas and Singapore Airlines, took to the skies in January this year.
Air Pegasus and Trujet also started services this year. Another positive for the sector was the entry of IndiGo in the Bombay Stock Exchange, the first for an airline in last nine years. The airline, which firmed up its order for 250 ‘A320neo’ aircraft of Airbus, raised over Rs 3,000 crore from the capital market.
Air India also did not make much negative news this year as it was slowly picking up pace on its turnaround plan with a new man, Ashwani Lohani, at its helm. Jet Airways, which also placed an order with Boeing for 75 fuel-efficient 737 Max single-aisle aircraft, subsumed its low-cost arm Jetlite into the main brand.
However, all was not well in the sector with fliers complaining about a rise in flight fares, especially those booking on spot and during the festive season. The issue found its echo in Parliament several times with Rajya Sabha Deputy Chairman P J Kurien even saying the airlines were “extorting” passengers.
There were calls for government intervention in regulating airfare, but the Civil Aviation Ministry rejected any such move. A DGCA study earlier this year had shown that most of the tickets sold by airlines are “not at exorbitant prices”. The report by the DGCA — after analysing the airfares of scheduled domestic airlines on 18 routes in 2014 — showed that the competition among operators is helping contain the fares.
At the policy level, the government took back its decision to privatise four airports in Kolkata, Chennai, Jaipur and Ahmedabad, despite inviting bids. Airport security was another issue highlighted by a Parliamentary Standing Committee following a violent incident between CISF personnel and AAI employees in Kozhikode airport in which one person was killed.
With increasing terror threat perception, it also wanted CISF to take over security of all airports in the country. At present, eight out of 26 hypersensitive, 19 of 56 sensitive and 12 out of 16 normal airports were not under the security cover of paramilitary force CISF.

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