Aviation Policy 2008 to attract private sector

[Naveed Yaseen]

By Sajid Chaudhry
ISLAMABAD: National Aviation Policy 2008 aims at allowing private sector to construct and operate new and existing airports, to start private air taxi service through aircrafts, helicopters on chartered or non-chartered basis, 10-year tax holiday will also be offered to the companies intending manufacturing aircrafts in Pakistan.

National Aviation Policy 2008 is likely to be presented before the federal cabinet in its next meeting for formal approval to facilitate national aviation sector surpass air traffic growth from 7% to over 8% per annum.

Market Access in Air Service: Pakistan shall liberalise bilateral arrangements on reciprocal basis with our bilateral partners to provide service from/to Karachi, Lahore and Islamabad after completion of new airport to the destinations in Western Europe, North America and Africa and to destinations towards East.

While finalising new Air Service Agreements (ASAs), multiple airlines designation clause and article on Code-Share shall be incorporated. There shall be no commercial agreements as part of bilateral agreements. However, airlines shall be free to enter into such co-operative marketing arrangements as are mutually agreeable, which would be outside of ASAs.

Market Access in Cargo Service: Pakistan shall continue to follow open skies policy for cargo operations based on 3rd, 4th, 5th freedom traffic rights. Karachi and Gwadar international airports to shall be promoted as transshipment hub. Cargo villages shall be established on public private partnership at major international airports and linked with National Trade Corridor.

Paid up Capital and Fleet Registration: Paid up capital for Regular Public Transport License shall be increased from Rs.100 million to Rs.500 million, which shall be reviewed periodically by CAA Board. Fleet registration in Pakistan shall be mandatory for all Pakistani aircraft operators except pure cargo aircrafts. Requirement of minimum fleet size for a Regular Public Transport (RPT) license holder shall be at least 3 airworthy aircrafts for domestic operations and at least 4 airworthy aircrafts for international operations. There shall be no permanent addition to capacity by inducting foreign registered aircraft on wet lease other than pure cargo aircraft. Temporary induction of foreign registered aircraft on wet lease may be permitted under extra ordinary circumstances for a short period subject to a maximum period of 90 days. For induction of aircraft, the criteria of minimum remaining operational cycles/hours shall be prescribed by the Director General CAA through Air Navigational Order (ANO).

Tax Holiday: Some 10 year tax holiday would be granted to air craft manufacturers to encourage them invest in aircraft manufacturing units in Pakistan along with establishment of aircraft maintenance companies, flying training schools and ground training schools. Government would rationalize and reduce taxes chargeable to passengers on international and domestic routes. The government would also exempt all taxes and duties on air tickets on secondary destinations. The same privilege shall be extended to operators of small aircrafts and helicopters.

Security equipments and weapons imported by Airport Security Force, CAA, private airports and other operators shall also be exempted from all taxes and duties.

Air Taxi Service: New National Aviation Policy to introduce Air Taxi Service Concept in Pakistan. According to the draft policy document, about 64% of Pakistan population lives in rural areas, with little or no access to air travel even in emergency, for want of air strip, helicopter, helipads and suitable aircrafts to commute to/from remote areas. There are fairly large numbers of cities, which are developed to adopt the concept of air taxi and private owned aircraft for commuting.

In order to develop Air Taxi Service concept in Pakistan the procedure for acquisition and operation of aircrafts, including helicopter, micro-light ultra-light air crafts and hot air balloons shall be liberalized to encourage travel and sports activities.

Use of helicopters for tourism, emergency operations and adventure sports in private sector would be promoted and encouraged and no charges would be imposed for such operations. Liberalized guidelines would be formulated, in consultation with users, to promote and encourage private investment in flying clubs, air taxi service, private ownership of the aircraft, and aero-sports activities i.e. hang gliding, ballooning, heli-skiing and para-jumping. Flying clubs shall be facilitated to overcome shortage of pilots in the country i.e. to develop air strips out side control zones of major air ports fort exclusive use of training flights and to lease Civil Aviation facilities to flying clubs where available.

Charter Service: Under the new policy domestic charter operations would be allowed to Pakistani Operators only using Pakistani registered aircraft including helicopters flown by Pakistani pilots. International charter originating from Pakistan would be allowed on all international routes irrespective of the scheduled operations. On routes

Commercialization of Airports: “Airport Cities” shall be developed including hotels on public private partnership at all major airports. Vacant land at airports shall be evaluated and developed for construction of aviation facilities like cargo complexes and aircraft maintenance facilities. Land at remote and non-operational airports shall be utilized for non-aeronautical commercial and recreational purposes. CAA shall formulate land lease policy to make it commercially viable for private investors.

New Airports: Construction of new commercial airports would be permitted to meet the air traffic. Private sector shall be free to construct and operate new as well as existing airports, airstrips, helipads, heliports including cargo complexes on BOO, BOT, or any other management arrangement and to raise non-aeronautical revenues from these premises. Privatization of airports shall be pursued to make them more efficient and productive.

Consumers Protection: To protect the interests of the users, facilitation committee consisting representatives from government, passengers, travel and tour operators, aircraft operators, airport operators, exporters, importers, cargo handling agents, aero-sports and flying clubs would be set up at national regional and local levels.

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