Air fares could go up as the new aviation regulator, the Civil Aviation Authority, comes in with the right to levy a cess on air travel.
The Union Cabinet today gave ‘in principle’ approval to the proposal (for bringing a legislation for a Civil Aviation Authority or CAA). Information and Broadcasting Minister Manish Tewari told reporters here that the new regulator, which will replace the Directorate-General of Civil Aviation (DGCA), will be an autonomous body. It will look after aviation safety and other issues such as affordable air services.
The proposed authority will have a chairperson, a director-general (DG) and at least seven, but not more than nine, members. A multi-member panel, headed by the Cabinet Secretary, will select the chairperson, the DG and whole-time members.
The new authority will also enjoy administrative and financial freedom to meet functional requirements for an effective safety and oversight system, something that the existing DGCA lacks. In addition, it will also have the powers of economic and environmental regulations and consumer protection.
The recruitment for the CAA will be different, with no role for the Union Public Services Commission in the hiring. The proposed authority will not only pay market-linked salaries to its employees but will also follow a hire-and-fire policy.
The DGCA had limited financial powers and was thus “incapable of making adequate structural changes” to meet the demands of a dynamic civil aviation sector, a senior Government official said. This necessitated its replacement with the CAA, which will have more administrative and financial powers to deal with the fast changing aviation scenario.
The CAA, like the DGCA, will also deal with matters relating to financial stress on safety of air operations, as witnessed in connection with the bankrupt Kingfisher Airlines in October last year. Issues relating to consumer protection and environment regulations in the sector would also be addressed by the CAA, according to the draft legislation.
Welcoming the move, Executive Director of the Bird Group Ankur Bhatia said, “With this move, the Indian aviation industry will be at par with UN’s International Civil Aviation Organisation and in line with aviation regulators in other countries.”