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Last Updated : Oct 17, 2020 08:09 AM IST | Source: Moneycontrol.com

How the COVID-19 pandemic will affect rules under National Civil Aviation Policy

As per the process laid out in the policy, the next update will be done after five years which is scheduled in 2021 with the effective date of the revision being the Winter schedule of 2022.

Planes parked at IGI airport in New Delhi
Planes parked at IGI airport in New Delhi

The government formulated the National Civil Aviation Policy (NCAP) in 2016. While the policy document looked at many aspects of aviation in India, including laying the foundation for Regional Connectivity Scheme (RCS) - UDAN (Ude Desh ka Aam Nagrik), the contentious Route Dispersal Guidelines (RDG) were revamped too. India remains one of the few countries worldwide where such rules remain in place! Ironically, the RDG mandate airlines to fly to certain routes in the country which are classified as remote while the RCS-UDAN scheme encourages airlines to fly on similar underserved and unserved routes!

The RDG came into effect in 1994 to help increase connectivity to Jammu and Kashmir, North East and a few other such regions. Indian aviation has changed leaps and bounds since then! From just a handful of “air taxi” operators to having airlines which are the talking point of the world and loved by the aircraft manufacturers! The scheme was finally updated in 2016 as part of the NCAP.

Policy in a nutshell

Close

Airline routes in India are classified as Category 1, Category 2, Category 2A and Category 3. The routes which are longer than 700 km with an average seat factor of more than 70 percent with an annual traffic of 5 lakh passengers are categorised as Category 1.

Category 2 routes are those from any city to those airports which are listed as underserved. These include airports in Jammu and Kashmir, Ladakh, North East, Uttarakhand, Himachal Pradesh, Andaman and Nicobar and Lakshadweep while Category 2A routes are those between the airports in the regions listed as Category 2. Category 3 routes are all other routes.

Airlines have to fly 10 percent capacity by ASK on Category 2, 1 percent on Category 2A and 35 percent on Category 3. These are a percentage of capacity deployed on Category 1 routes.

The changes and what does the policy say?

The revised RDG ensured that the Category 1 routes are based on traffic patterns and Category 1 routes will change periodically based on the change in traffic patterns. The Category 1 routes will be updated every five years with sufficient time being given to airlines to plan the schedule. The first such change was done in 2016 and the revised Route Dispersal Guidelines came into effect in the Winter Schedule of 2017.

As per the process laid out in the policy, the next update will be done after five years which is scheduled in 2021 with the effective date of the revision being the Winter schedule of 2022.

To add new routes, a route has to satisfy the criteria laid out in the policy in terms of annual traffic and average seat factor.

COVID-19 times

The unprecedented times due to the pandemic has meant that India has not seen a single scheduled commercial service for two months. Since the re-start, there has been a cap on the capacity and there is no clarity when airlines will be allowed to operate at full capacity. This has translated into air traffic being down by over 50 percent across the country with few routes suffering further due to additional restrictions at one of the airports.

The policy looks at two full schedules (consecutive summer and winter schedule) to get the data before categorising rules. The current summer schedule has seen nearly two months of disruption and as the schedule comes to an end later this month, there has hardly been any significant traffic to make comparison. Likewise, current trends indicate that the winter schedule is unlikely to see big gains to reach pre-COVID19 levels!

This effectively takes away the two seasons which would be used to calculate the revision of Category 1 routes.

What are the options?

While the times have been unprecedented, the policy has also come up for renewal for the first time! In such a combination, the government could look at multiple options to help the airlines.

Continue as-is

The government can push the revision by a few years and continue as-is. This would mean that the current 20 Category 1 routes continue and airlines do not have to plan anything differently as they recover from the hit taken due to COVID-19.

Remove RDG

A drastic measure but something which will help in the intermediate run. Current times have seen the airlines plan newer routes and cater to ever-changing demand. This shows that airlines respond to market dynamics in a better manner than what regulation can achieve!

Reduce Category 1 routes

Going by the letter and spirit of the policy, the government could look at reducing the routes under the Route Dispersal Guidelines in line with what the numbers suggest to ensure that airlines have a lesser burden on them as everyone tries readjusting the fleet, routes and adapt to the market.

In either cases, the time to take a call is now as we inch towards 2021 fully aware that the policy cannot be taken into consideration due to the market situation and probably look at having a force majeure clause for future policies!

Ameya Joshi runs the aviation analysis website Network Thoughts.
First Published on Oct 16, 2020 10:53 pm
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