CAA proposes tax cut to attract passengers

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CAA proposes tax cut to attract passengers

Post by Abbas Ali » Tue Apr 18, 2006 10:33 am

By Masood Anwar

KARAHCI: In a bid to increase air traffic in the country and attract passengers the government will rationalise the various taxes levied on air travel and bring them under one head.

Presently, there are multiple taxes on tickets like Capital Value Tax (CVT), Central Excise Duty (CED), Withholding Tax (WHT) etc. In order to encourage the growth of domestic and international air traffic, government taxes may be rationalised under one single head, the Civil Aviation Authority (CAA) proposed to the federal government in a draft prepared for the New Aviation Policy.

According to the draft prepared in consultation with the airlines operating in the country, the CAA proposed reduction in taxes for the airlines operating on tertiary routes. The new aviation policy is to be unveiled by the federal government in June this year.

Chitral, Gilgit, Skardu, Gwadar, Pasni, Panjgur, Turbat and Jiwani are termed as the tertiary routes by the government of Pakistan. Due to low passengers turn out, airlines suffer losses on tertiary routes. To increase the number of passengers Government may reduce taxes for these routes, the CAA recommended.

Sukkur, Moenjodaro, Bhawalpur, Zhob, Saidu Sharif, Jacobabad, Dalbadin, Bannu, Parachanar, Sehwan Sharif, Rahim Yar Khan, Dera Ismail Khan, Dera Ghazi Khan, Nawabshah, Hyderabad, Ormara, Khuzdar, Rawalakot and Muzaffarabad are decaled as the secondary routes while Karachi, Lahore, Islamabad, Peshawar, Quetta, Faisalabad, and Multan are called primary routes.

In the new aviation policy, all private airlines will be bound to operate minimum four primary routes two of which should include Peshawar, Quetta, Multan or Faisalabad and minimum of one secondary route and minimum of one tertiary route.

Failure to comply with the minimum requirements would result in curtailment of current operations including international routes and frequencies. To encourage the private airlines in the country, the CAA proposed to sign new aviation contracts only on the multi designation of the airlines.

Private sector airlines along with PIA should also be eligible to operate in countries where open skies or multiple designations of airlines is available and where PIA is not operating to its full entitlement, the surplus capacity of PIA on these routes would be given to private airlines, the CAA proposed.

Gawadar will be unilateral open skies for passenger operations. No formal air services agreement shall be required. Minimum fleet requirement for domestic operations by a license holder shall be at least three airworthy aircraft on dry lease or at ownership basis and registered in Pakistan with at least two aircraft in operation at all times to avoid inconvenience to the travelling public, the CAA put condition for the private airlines.

For commencement of international operations fleet requirement for a license holder shall be at least four airworthy aircraft on dry lease or ownership basis and registered in Pakistan with at least three aircraft in operation at all times to avoid inconvenience to the travelling public.

Wet leasing of foreign registered aircraft will not be permitted except in extra-ordinary circumstances i.e. unforeseen surge in market demand or sudden shortage of airline capacity due accident or incident, which shall not exceed a period of three months, the CAA said. In case of Eastern Origin or Russian aircraft, maximum age at the time of induction should be 15 years and airworthiness criteria specified by CAA.

In case of Western or European aircraft no age limit is required. However, airworthiness would be the criteria. There shall be no addition to capacity by virtue of wet leasing. Validation of Pilot’s licenses of wet leased aircraft is mandatory under the rules for which visa and work permit in Pakistan shall be a pre-requisite, the new proposed aviation policy said.

Source: The News
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Post by flyingsystem » Tue Apr 18, 2006 11:53 am

Some points are interesting: for ex, the extra PIA routes can be flown by private airlines on int'l routes.

However, I think too much legislation is not good for the sector: ther is no sence to have minimum three aircrafts for an airline!!! :shock:
When an airline starts ops, it's surely difficult for them to have directly three aircrafts.
And whats this policy to fly this or this sector, no comment!!!!

This text have to be reviewed urgently before being applied!!!