ISLAMABAD: The proposed aviation policy, now in final round of consultation, seeks to outsource all major airports and buildings to foreign airlines and offers tax-free investment opportunities in the aviation industry.

Finance Minister Ishaq Dar, who presided over a meeting on the proposed policy, is reported to have praised the initiatives proposed by the aviation division and promised to study their financial aspects in consultation with the Federal Board of Revenue before taking it up for approval, according to a finance ministry statement.

The meeting was briefed by Prime Minister’s Special Assistant on Aviation Shujaat Azeem, who said the policy prepared after 14 years would serve to promote the aviation sector as a dynamic and forward-looking sector. All stakeholders, including airlines, flying clubs, charter operators, cargo operators and ground-handling agencies, had been consulted in the process.

Mr Azeem told the meeting that the draft aviation policy emphasised relaxation in the tax regime to encourage growth of the sector.

He said the aviation sector’s contribution to the country’s economy was less than 0.01 per cent against 1.5 to nine per cent in India, Malaysia, Philippines and Thailand.

He said that only about eight per cent of 180 million Pakistanis had the resources to travel by air, which was not an encouraging situation but which could be changed with the provision of appropriate incentives to prospective investors.

He said the draft policy offered tax-free investment in the aviation sector and outsourcing of all major airports (Lahore, Karachi and Islamabad), landside and buildings to prominent foreign companies active in the airport business through a transparent process.

The policy also recommended developing quality repair and maintenance facilities in the country to save huge expenses on seeking such services abroad. The meeting was informed that investment in the sector would not only generate revenue but also create a large number of job opportunities and thus help alleviate unemployment.

Sources said the draft policy sought to allow new airline licences for passenger and cargo services to the private sector and encourage utilisation of airports for regional trans-shipment. For achieving this, the new licences would be issued to firms having a minimum paid-up capital of Rs500 million for regular public transport both for passengers and cargo.

Charter domestic licences would be available to companies having a paid-up capital of Rs25-50 million and international charter airlines while licences would be available for aerial work, domestic and international and flying schools having a paid-up capital of Rs13-25 million.

There would be no landing and housing charges at secondary airports for scheduled services and competition would be encouraged for aviation services.

To ensure an efficient and quick transit, a single-window clearing mechanism comprising airlines, freight forwarders, customs house agents, customs, regulatory agencies, airline ground-handling agents, insurance and bank facilities would be made available under one roof.

The country will continue to allow open skies policy for cargo operations to designated foreign airlines of bilateral partners and reciprocal cooperation to passenger airlines.

The private sector would be free to construct, operate and run new and existing airports and airstrips, lakes for amphibian aircraft operations, helipads and heliports including cargo complexes on build, own and operate, build, operate and transport mechanism or any other management arrangement to generate aeronautical revenues.

Privatisation of airports shall be pursued to make them more efficient and productive.

The policy is being finalised at a time when all western airlines have wound up their operations in Pakistan due to security concerns.

Published in Dawn January 14th , 2015

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