Aviation policy yields Rs three billion in seven months: CAA official

Rupees 3 billion have been generated out of national aviation policy in seven months in the current fiscal year, ie, 2015-16. Joint Director Civil Aviation Authority Syed Aftab Gilani told Business Recorder that national aviation policy was formulated after 15 years in March 2015 after consulting all the stakeholders including international and local industry professionals and consultants representing different segment of aviation industry.
He said tax and duties were exempted on wet lease and dry lease which generated revenue up to Rs 3 billion in seven months. In principle, tax relief would be on investment and taxes would be levied on revenue. The impact of liberalisation, open skies, tax and other pertinent strategic policy decisions has improvised the services while delivering revenues and contributing to the National Gross Domestic Product, he said.
The outcome of the policy clearly displays statistical significance and relevance to Pakistan, and such bold policy decisions must be favourably considered for long term, sustainable economic growth and prosperity of Pakistan. He said the CAA contributes to the overall economic growth of nation, provides significant revenues to national public finances, while it creates large number of high-value jobs and above all it delivers extensive catalytic benefits to international trade and tourism.
While talking about the obstacle which CAA was facing in terms of growth of air travel and cargo due to unjustified taxes and duties, which is hampering investment and not yielding any significant revenue for the government, he said, adding that rationalisation of duties and taxes in the aviation sector shall help attract more businesses, thus resulting in growth of the industry and ensuing benefits to the end-users.
He said taxes shall be restructured and simplified in line with the best international practices. Higher taxes and duties on aviation businesses negatively impact transportation activity in the country, which in turn, adversely impacts Gross Domestic Product (GDP) and employment. Therefore, the policy strongly advocates that there should be no taxes and duties on investment in aviation sector. Tax breaks and exemption of CAA charges shall also attract investors in various sectors of aviation business, including establishment of quality Maintenance, Repair & Overhaul (MRO) organisations, he added.
He told under the new aviation policy, CAA has achieved marvellous performance with respect to air traffic, for example, there used to be only 2 flights per week in Faisalabad which has turned out to be up to 58 flights per week. Similarly, in Multan, traffic increased from 42 flights per week to 169 flights per week.
As per policy, CAA generates its own revenues to cover its operating and administrative expenses whereas Airport Security Force (ASF) depends on the government for the same. Accordingly, CAA funds its development projects, through its own resources and ASF looks up to the government to fund its development projects. This sometimes causes delays in cases where urgent action is required to plug-in security loopholes in the physical infrastructure.
Hence, necessary legislation needs to be done at the highest level to fix financial responsibility for the development of necessary security infrastructure, including small development schemes, at the airports to streamline processes and eliminate inordinate delays, he said.
Moreover, he said there is slow and inadequate infrastructure development (aerodrome facilities and navigation facilities on the airside). This aspect has been neglected in the past and is being addressed on priority, he added. He said there are also huge gaps in communication and surveillance coverage in the western and northern parts of Pakistani airspace due to limitations of conventional transmitters and sensors in hilly terrain. This could have been resolved long ago by application of satellite technology like CPDLC (Controller Pilot Data Link Communication), and ADS(C) [Automatic Dependent Surveillance (Contract)], he added.
He said these technologies are ideally suited not only for the hilly terrains but are also cheaper alternates compared to conventional tools of communication and surveillance necessary for air traffic control at long distances. Hence, under the same policy, the action is being initiated by the CAA to address this issue urgently as it relates to safety of air traffic transiting through Pakistan airspace, he added.