Aviation policy: Govt to outsource airports to foreign companies

Govt to pursue bilateral open skies policy to create an environment of competition, gain new routes

ISLAMABAD: In a major decision, the government has agreed to outsource all major airports, land and terminal buildings to renowned foreign companies in aviation business through a transparent selection process.

Initially, the Lahore Terminal will be outsourced for which the International Finance Corporation, a member of the World Bank Group, has been engaged as a consultant, say officials.

The agreement was reached during a meeting of the Economic Coordination Committee (ECC), held on March 19, which considered and approved the draft of Aviation Policy 2015.



It decided, in principle, to enhance the paid-up capital requirement for airline operators from Rs100 million to Rs500 million in an attempt to attract and encourage financially sound investors.

Officials familiar with the development said the government would pursue bilateral open skies policy with different countries on the principle of reciprocity in order to create an environment of competition and gain new routes for Pakistan’s airline operators.

Under the policy, a maintenance, repair and overhaul facility will be developed in the country’s north and two cargo villages will be established in the northern and southern areas.

The new policy also called for strengthening the safety and security of air traffic by making the Safety Investigation Board, now part of the Civil Aviation Authority, as an independent unit in accordance with guidelines of the International Civil Aviation Organisation (ICAO).

Permission for utilising wet-leased aircraft has been enhanced from 90 days to 180 days and the number of such aircraft will not be more than 50% of an airline’s fleet.

Maximum aircraft age at the time of induction has been fixed at 12 years and the airplanes will be replaced after 20 years of age. Chief operating officers will be appointed at the airports to establish unity of command over six different agencies such as the Airport Security Force, Customs and immigration.

The ECC cleared the new aviation policy in principle and constituted a committee comprising the special assistant to prime minister for aviation, law and justice secretary and Privatisation Commission chairman to discuss the proposed outsourcing mechanism and bring clarity in the process.

The ECC was told that the aviation policy was approved in 2000, but due to changes and advancements in the industry, the aviation division prepared a new policy draft in consultation with the stakeholders. They included the airlines, flying clubs, chartered operators, ground-handling agencies, cargo operators and general aviation services providers.

The new policy has been designed with the aim of stimulating growth in the aviation sector and enhancing its contribution to the country’s gross domestic product from the current 0.01% to around 3% in the next five years.

This objective can only be achieved by introducing changes in the regulatory framework, adopting technology and easing the taxation framework.

trade.Published in The Express Tribune, March  27^th,  2015.

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