ABBREVIATIONS
AOC - Air Operator’s Certificate
ASA - Air Services Agreement
BOT - Built Operate and Transfer
CAA - Civil Aviation Authority
CARs - Civil Aviation Rules 1994
DG CAA - Director General Civil Aviation Authority
ICAO - International Civil Aviation Organization
PIA - Pakistan International Airlines
PIAC - Pakistan International Airlines Corporations
SRO’s - Special Regulatory Orders
BARIP Board of Airline’s Representatives in Pakistan
MCBP - Market Clean up Board Pakistan
1) OBJECTIVES OF THE POLICY
(i) To ensure safe and efficient civil aviation operations in the country facilitate operations in the domestic market of the safest standards in conformity with ICAO standards by an optimum number of airlines to encourage competition without dissipating the market. For international operations, the conditions will be provided to allow fair and reasonable competition to the Pakistan carriers with sufficient encouragement to the foreign airlines to continue to serve Pakistan in the most efficient manner and in largest number possible
(ii) To contain predatory pricing and unfair competition, both internationally and domestically, through a system of filling of tariffs and compliance thereof.
(iii) To improve terminal facilities and remove bottlenecks for passengers, making Pakistani airports passenger friendly.
(iv) To promote and encourage tourism in Pakistan by integration of the tourism policy with the aviation policy.
2) OPEN SKIES POLICY
Unlimited Open Skies Policy may not be adopted for the present. However, selective Open Skies Policy may be implemented by having agreements on the principle of reciprocity and bilateralism with maximum number of countries.
3) AIRLINE LICENSE
The airline licenses may be issued strictly in accordance with the provisions of CAA Rules.
4) CONDITIONS FOR OPERATIONS BY AIRLINES –
(i) Minimum fleet requirement will be at least three aircrafts to avoid in convenience to the traveling public. –
(ii) Pakistani airlines will be permitted to induct aircraft on wet or dry lease subject to conditions laid down by Government/CAA.
(iii) Fleet registration in Pakistan will be mandatory for Pakistani airlines. Within one year of implementation of policy at least one aircraft must be registered in Pakistan. -- The restrictions on age and origin of aircraft inducted by private airlines to be as follows:
In case of Eastern origin/ Russian aircraft, maximum age at the time of induction 15 years and airworthiness criteria specified by CAA.
In case of Western/European aircraft no age limit. However, Airworthiness would be the criteria.
5) DOMESTIC OPERATIONS
(i) PIA and private sector airlines will continue to freely operate on domestic routes.
(ii) Eight destinations i.e. Chitral, Gilgit, Skardu, Gwadar, Panjgur, Turbat, Pasniand Jiwani may continue to be treated as socio economic routes and the fares may be deregulated.
(iii) Private airlines must service the following domestic routes as a minimum:
--> (a) Minimum of two trunk routes one of which should included Peshawar, Quetta, Multan or Faisalabad.
--> (b) Minimum of 2 frequencies per week on one socio economic or one tertiary route.
In case of their inability to service socio economic or tertiary routes, private airlines to pay a royalty to PIA @ Rs. 500,000 per month.
6) International Operations --
(i) PIA may continue to operate on all routes presently being operated by it -- Private sector airlines along with PIA should also be eligible to operate to countries where open skies or multiple designations of airlines are available.
(ii) Where PIA is not operating to its full entitlement, the surplus capacity of PIA on these routes may be given to private airlines.
(iii) While finalizing new ASAs, Pakistan should opt for multiple designations of airlines, particularly for cargo and charter services.
(iv) Under the ASA’s where ever PIA has no plans to operate, private sector airlines, if they so desire, may be designated to operate on such routes and PIA’s designation may be withdrawn.
(v) Operation by private carriers on the international routes should be linked with their continued operation on domestic routes for at least one year and meeting all mandatory conditions of domestic operations to justify acquisition of international route.
(vi) 5th freedom rights are to be granted strictly on the basis of reciprocity, ensuring balancing of rights in terms of market value and that the commercial interests of Pakistan are not compromised. Selective concessions may be made for quality airlines.
7) GOVERNMENT TAXES & DUTIES
(i) For levy of Government duties & taxes on import of aircraft andn spares, both PIA and private airlines would be treated at par.
(ii) On import of aircraft, engines and spares a univorm duty of 10% would be levied. The airline may pay 5% as down payment and the remaining 5% in two years in installments.
(iii) Used aircraft engines/spares are allowed to be iimported on the duty to be 10 % of the value of the item.
(iv) The ramp area at airports is declared as duty free area / zone.
Note: Government taxes and duties are subject to reviews by Central Board of Revenue through SRO”s. Current SRO’s may be referred pm website www.cbr.gov.pk Finance Division to be consulted.
8) OPENING UP OF NORTHERN GATEWAYS OF PAKISTAN TO FORIEGN AIRLINES
Northern gateways will remain open without compromising foreign airlines frequencies to the Southern gateways. Additional frequencies to Lahore airport will be granted upon completion of the new terminal facilities. Grant of access will be permitted to quality carriers on basis of reciprocity, available capacity and terminal handling facilities.
9) INTERNATIONAL CARGO SERVICES
(i) Pakistan should continue to allow open skies policy for foreign airlines, while simultaneously trying to convert the unilateral policy into bilateral open skies with major destinations of the world.
(ii) Private sector will be encouraged to establish all cargo airlines including charter in future.
10) INTERNATIONAL CHARTER OPERATIONS
No restrictions may be placed on international charter services.
11) CAA’s AERONAUTICAL CHARGES
The CAA Pakistan’s aeronautical charges for domestic and international operations should be reviewed from time to time in consultation with users.
12) CONSTRUCTIONS OF AIRPORTS
New airports will be constructed on BOT basis unless otherwise specified by the Government of Pakistan. Private sector participation in the construction of airports may be encouraged.
13) MONITORING & IMPLEMENTATION OF AVIATION POLICY
The aviation policy will be implemented by DG CAA. Review and monitoring of the policy will be carried out by the Ministry of Defense.
14) MARKET CLEAN UP BOARD
In order to regulate tariffs, a market clean-up board will be established by the Civil Aviation Authority, with one representative each from PIAC, AOC, private airlines and travel agents. The board to meet as required reviewing the tariffs filed by airlines. Investigate complaints and impose penalties on violators.
15) ADDENDUM
Airworthiness Criteria for Cargo Aircraft
The following shall be counted toward “Airworthiness Criteria” of an aircraft at the time of its induction by cargo operators:
The Aircraft shall not exceed:
--> (a) 75% of designed calendar life at the time of induction of aircraft, and
--> (b) 75% of ultimate designed calendar life at the time of induction of aircraft.
(Reference Ministry of Defence Letter # AT-10 (11) / 2000 dated December 18, 2004 and Civil Aviation Authority, Airworthiness Directorate, policy letter # 69 (Rev-1) HQ CAA/22634/31/AW dated January 05, 2005)