At a time the world aviation industry is thriving, the Pakistan International Airlines is sinking in debts and the Civil Aviation Authority, which is responsible for regulating the aviation operations, is struggling to meet its expenditures. The government has approved a new aviation policy to partially outsource all major airports of the country to foreign operators, paving the way for tax-free investment opportunities for the local and foreign investors in the aviation industry of the country.The open sky policy will be liberal with zero taxation on investments in the sector.
The aviation policy also entails outsourcing of Northern Areas airports, like Gilgit, Chitral and Skardu terminal buildings to the private sector to promote tourism and connectivity and seeks to transform Civil Aviation Authority into an independent regulatory body by shedding its responsibility of operations of the airports.
The government has also decided to introduce a model of public-private partnership to outsourceairport operations, management and development to the world renowned foreign companies in airport business through a transparent process. The International Finance Corporation will also be engaged in the matter.
According to the policy, chief operating officers will be introduced for all major airports while cargo villages will be established in Lahore, Islamabad and Karachi. The draft of the aviation policy emphasises for relaxation in the tax regime to encourage growth of this sector.
The policy will also allow new airline licences to the private sector and encourage utilisation of airports for regional transshipment and to facilitate passenger and cargo services.
Under the policy, paid-up capital for an airline operation has been enhanced from Rs 100 million to Rs 500 million with an aim to attract financially-sound investors in the aviation sector while aminimum of three airworthy aircraft have been fixed for domestic and five planes for international operations for a company desiring to start its operations. Policy has been termed a forward-looking policy with an aim to attract foreign airlines and investment in the aviation sector.
The maximum aircraft age at the time of induction has been fixed at 12 years while any aircraft reaching the age of 20 would have to be replaced. The government has also increased the period of aircraft on wet lease from three months to six months and the number of wet-leased aircraft should not exceed more than 50 percent of the fleet capacity of the airline.
Aviation is an industry in the developed economies and the government should have to encourage the private sector to invest more and more in this sector. Unless a prudent policy is implemented, the country will continue to lag behind even the tiny Arab states.
