<p>To facilitate safe, secure and affordable service to air passengers, the government will soon set up a Civil Aviation Authority replacing the present Directorate General of Civil Aviation (DGCA).<br /><br />“The proposal to form a Civil Aviation Authority (CAA) in place of the DGCA is in formative stage,” Civil Aviation Minister Ajit Singh informed the Rajya Sabha in a written reply to a question.<br /><br />The proposed CAA will have adequate financial and administrative flexibility to meet functional requirements for an effective safety oversight system. In addition, it will also have the powers of economic regulations, consumer protection and environment regulation.<br /><br />With the passenger volume going up steeply and the number of civil aircraft operating in the country also expected to increase, such an authority has become a necessity in India, analysts opine. Similar set up exists in many countries, including the US, Sri Lanka and Pakistan.<br /><br />The minister informed the House that the CAA will be set up through a separate Act. However, the present legal framework such as the Aircraft Act 1934, will continue to govern the aviation sector.<br /><br />President Pratibha Patil had earlier this month said the government will soon bring a bill in Parliament towards setting up of the CAA. In her address to the joint Budger session of Parliament, she also announced constitution of Accident Investigation Bureau in due course. <br /><br />Singh informed the House that an inter-ministerial working group set up to identify reasons causing stress in the civil aviation sector and suggest remedies, has recommended rationalisation of value added tax on aviation turbine fuel, permission to foreign airlines to invest in the domestic carriers and allow airlines to import ATF directly.<br /><br />The group has also recommended revision of fare structure by airlines to meet the rising <br />cost of operations.<br /><br />According to the returns filed by airlines with the DGCA, all scheduled airlines, except IndiGo, are incurring losses.<br /><br />Industry sources have placed Rs 26,000 crore of operational losses between 2007-2010 and Rs 10,000 crore loss anticipated in 2011-12. The spiraling cost of aviation turbine fuel, global economic slowdown and low yield due to intense competition and consequent widening the gap between revenue and expenses have contributed to losses by airlines.<br /></p>
<p>To facilitate safe, secure and affordable service to air passengers, the government will soon set up a Civil Aviation Authority replacing the present Directorate General of Civil Aviation (DGCA).<br /><br />“The proposal to form a Civil Aviation Authority (CAA) in place of the DGCA is in formative stage,” Civil Aviation Minister Ajit Singh informed the Rajya Sabha in a written reply to a question.<br /><br />The proposed CAA will have adequate financial and administrative flexibility to meet functional requirements for an effective safety oversight system. In addition, it will also have the powers of economic regulations, consumer protection and environment regulation.<br /><br />With the passenger volume going up steeply and the number of civil aircraft operating in the country also expected to increase, such an authority has become a necessity in India, analysts opine. Similar set up exists in many countries, including the US, Sri Lanka and Pakistan.<br /><br />The minister informed the House that the CAA will be set up through a separate Act. However, the present legal framework such as the Aircraft Act 1934, will continue to govern the aviation sector.<br /><br />President Pratibha Patil had earlier this month said the government will soon bring a bill in Parliament towards setting up of the CAA. In her address to the joint Budger session of Parliament, she also announced constitution of Accident Investigation Bureau in due course. <br /><br />Singh informed the House that an inter-ministerial working group set up to identify reasons causing stress in the civil aviation sector and suggest remedies, has recommended rationalisation of value added tax on aviation turbine fuel, permission to foreign airlines to invest in the domestic carriers and allow airlines to import ATF directly.<br /><br />The group has also recommended revision of fare structure by airlines to meet the rising <br />cost of operations.<br /><br />According to the returns filed by airlines with the DGCA, all scheduled airlines, except IndiGo, are incurring losses.<br /><br />Industry sources have placed Rs 26,000 crore of operational losses between 2007-2010 and Rs 10,000 crore loss anticipated in 2011-12. The spiraling cost of aviation turbine fuel, global economic slowdown and low yield due to intense competition and consequent widening the gap between revenue and expenses have contributed to losses by airlines.<br /></p>
