Recommendations of Pakistani Operators and
Aircraft Manufacturers
on
National Aviation Policy (NAP)
10 June 2023
1
Major Aspects of National Aviation Policy (NAP)
I.
Challenges being faced by the Industry.
II.
Strategic vision for a progressive, prudent and futuristic aviation policy.
III. Policies/procedures to achieve the proposed vision.
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Areas of Concern
Air Services Agreements
II. Taxes / Duties / FBR
III. Fuel
IV. Primary & Socio Economic Routes
V. MRO
VI. Wet Lease operations and Age of Aircraft
VII. Paid Up Capital / Equity
VIII.Infrastructure / Security / Safety
IX. Cargo
X. Scheduled Charter & Commuter Operations
XI. Flying Clubs and General Aviation
XII. Aircraft Manufacturing Industry
I.
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Airline Industry – Challenges
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Challenges
1.
2.
3.
4.
5.
6.
7.
8.
9.
Capacity dumping by airlines of Gulf, UAE and Turkey
Price war due to capacity glut
Drop in yields by up to 30%
High operating cost / low operating margins for airlines and other operators of
Pakistan
High fuel cost
Currency devaluation
High taxes/fees
Cumbersome government regulations / over regulation by PCAA
Grant of access to secondary airports like Multan, Faisalabad, Sialkot, etc to
foreign carriers.
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Challenges
Excessive Capacity Granted vs. Market Growth
Authorities in Pakistan have been granting traffic rights to foreign airlines, especially from
the Gulf, UAE and Turkey well in excess of actual point to point 3rd/4th freedom market.
As per Pakistan CAA data presented in the preamble of National Aviation Policy 2015, from 200913, domestic market in Pakistan grew at less than 1.8% per annum, while the International market
grew at a rate of 3.6% per annum.
However, during the same period of 2009-2013, traffic rights granted by Pakistan Authorities
grew by more than 100%, a more than 25% increase per annum.
Table below shows growth in grant of traffic rights to airlines of UAE/GULF, Sri Lanka, Turkey and
China from 2009-2013:
Year
Weekly flights
2009
202
2013
435
• Despite grant of excessive traffic rights, Pakistan market remained stagnant.
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Challenges
Growth in Market vs. Traffic Rights Granted (2008-2017)
I.
II.
III.
IV.
Average annual international market growth (2008-2017)
Market growth for nine years (2008-2017): 6% x 9 =
Weekly traffic rights of foreign airlines in 2008 were:
Based upon market growth of 54%, weekly flights
granted should also have increased by 54% or(129 x 54%)=
(i.e. traffic rights given should have been based on actual organic growth)
V. *Actual weekly flights granted up till 2017
VI. Actual % increase in capacity granted from (2008-2017)
VII. Increase in capacity that should have been granted (2008-2017)
flights
VIII. Capacity granted over & above organic market growth (516 flts –199 flts)
6%
54%
129 flights
199 flights
516 flights
400%
54% or 70
317 flights
Increase in capacity granted to foreign airlines was 400% as compared to
market growth of only 54% for the period 2008-2017. This created a severe
capacity glut in the market leading to intense price war by Gulf carriers which
are subsidized by their Governments. Operating margins of Pakistani Airlines
were eroded. Rise in fuel cost and rupee devaluation further deteriorated the
aviation industry of Pakistan.
*Airlines of UAE/GULF, Sri Lanka, Turkey and China
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Challenges
Weekly Landing Rights Granted (2008-2017) - Excluding Open Skies
to Airlines of UAE, Gulf, Turkey, China and Sri Lanka
600
500
498
516
447
400
300
288
235
200
100
317
172
129
136
136
0
2008
10 June 2023
2009
2010
2011
2012
2013
2014
Recommendations of Pakistani Operators and Aircraft Manufacturers on NAP
2015
2016
2017
8
Challenges
Airline Base Fare vs. Taxes and Charges - Pakistan
Total Paid
by
Passenger
Percentage
of FBR
Taxes to
Base Fare
Percentage
of CAA
Charges to
Base Fare
Percentage
of Total
Taxes and
Charges to
Base Fare
Base Fare
FBR Taxes
CAA
Charges
KarachiIslamabad
10,580
2,660
620
13,860
25.14%
5.9%
31.04%
SukkurIslamabad
8,000
2,531
620
11,151
31.64%
7.75%
39.39%
IslamabadLahore
7,000
1,694
620
9,314
24.2%
8.89%
33.09%
KarachiDubai
13,000
5,000
3,960
21,960
38.46%
30.46%
68.92%
Route
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Challenges
Comparative Tax Structure Domestic (Economy Class)
Country
Taxes and Charges (PKR)
Taxes and Charges as
Percentage of Base Fare
Pakistan
3,251
22%
India
1,555
4%
Malaysia
984
3%
China
950
17%
Iran
853
8%
Bangladesh
840
7%
Saudi Arabia
500
5%
Afghanistan
134
2%
• For Socio-Economic routes FBR Taxes are exempt, CAA charge - PKR 620
• FED on Long routes - PKR 2,000
Short routes -1,250
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Challenges
Comparative Landing Charges(International)
Aircraft
Karachi
Boeing 777-300ER
MTOW 340 Ton
3,074
Airbus A320
MTOW 77 Ton
696
Lahore
Amounts in USD
Islamabad
Dubai
Kuala Lumpur
Delhi
Beijing
3,074
4,080
3,843 Peak 5,100 Peak
2,057
1,131
1,374
2,362
503
213
250
471
696
870 Peak
924
1,155 Peak
Above table shows that landing charges of Pakistan Civil Aviation
Authority are the highest in the region.
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Challenges
1.
*Taxes and duties on domestic air travel in Pakistan is 22% which is significantly higher than
India 4% and Malaysia 3%, which needs to be rationalized.
2.
*Taxes and duties on International air travel in Pakistan is 21% which is significantly higher than
India 9% and Malaysia 3%, which needs to be rationalized.
3.
Because of higher taxes, (domestic and international) market is almost stagnant since 2006.
4.
16% FED on uplift of fuel for domestic operations.
* Source: IATA Certified information
Dropping of yields due to capacity glut, highly volatile fuel
price, currency depreciation and high taxation has resulted
in negative margins for aviation industry of Pakistan
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National Aviation Policy
Proposals
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Proposed Vision
To achieve sustained growth for Aviation Industry including self reliance in the field of
aircraft design and manufacturing for private sector in Pakistan, through maintenance of
high standards of safety, security and provision of state of the art infrastructure, while
ensuring a level playing field for all market players.
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Proposed Objectives
1.
Support and facilitate Pakistan’s macro economic policy.
2.
Provide a framework that encourages fair competition and development of new routes and
enhanced international/domestic air services to benefit travelers and aviation business.
3.
Provide a level playing field for airlines of Pakistan to grow and compete successfully in an
international market based on organic point to point growth, ensuring commercial reciprocity.
4.
Provide safe, secure, efficient and a commercially viable aviation industry including aircraft
design / manufacturing, which contributes positively towards the national economy.
5.
Rationalization of existing exorbitant taxes/duties/levies/Pakistan CAA charges.
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(i) Air
10 June 2023
Services Agreements (ASA)
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Air Services Agreements
1. Pakistan shall pursue a bilateral traffic rights policy with other
countries based on 3rd/4th freedom point to point organic market
growth, in the spirit of commercial reciprocity.
2. In cases where there is insufficient point to point market, 5th
freedom rights may be negotiated only to supplement 3rd/4th
freedom traffic.
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Recommendations
1.
2.
3.
4.
5.
6.
7.
8.
9.
Weekly flight operations of foreign carriers to be kept frozen at their present operations.
A moratorium be immediately placed on grant of any future traffic rights to foreign airlines.
Gateways offered to foreign carriers in Pakistan need to be restricted only to Karachi, Lahore
and Islamabad. All other points like Peshawar, Multan, Faisalabad, Quetta, etc may be offered
only as code share points with flights to be only operated by Pakistani carriers.
All ASAs to be reviewed on the basis of commercial reciprocity ensuring organic point to point
market growth and a level playing field for airlines of Pakistan.
Grant of 5th freedom to be negotiated only to supplement 3rd/4th point to point traffic.
Grant of capacity to be based on number of passengers or weekly seats keeping in view organic
market growth.
Prime slots to be reserved for the airlines of Pakistan and priority be accorded to them for push
back, take off and landing.
Representation of airlines of Pakistan in all in house and formal ASA meetings as was done in the
past. A member of the National Carrier be made a permanent member of Pakistan CAA slot
committee to be consulted before approving slots for foreign carriers.
A level playing field to be ensured for all aviation entities of Pakistan.
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Aviation Authorities in India have incorporated a condition in their
National Aviation Policy to not allow open skies to any country within a
radius of 5000km from their territory to safeguard the commercial
interests of their national airlines on short to medium haul routes.
As a result of the above policy, India despite being 7 times more populated
than Pakistan, the Gulf/UAE carriers could managed to uplift only 2.5 times
more traffic from India.
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(ii) Taxation / Duties / FBR
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Taxes / Duties / FBR
Tax relief as envisioned in the National Aviation Policy 2015 could not materialize
due to absence of a business friendly taxation regime.
In order to provide sustained growth to aviation industry and its allied sectors like
MROs, warehousing and aircraft manufacturing be declared tax/duty free. Areas
around airports may be declared tax/duty free zones for such facilities based on
UAE model.
a) Permission of setting up joint ventures with up to 49% foreign equity
participation.
b) 10 year holiday for corporate tax, import duties & taxes for joint ventures.
c) One window, same day, 24/7 facility for custom clearances (spares/supplies &
outside party jobs).
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Taxes / Duties/ FBR
Import Stage Taxes/duties
Exemption on taxes and duties on import of aircraft and aircraft parts was granted in NAP 2015. It is suggested that Import
duties and taxes should also be exempted on the following categories:
•
Engine
•
APU
•
Landing gears / aircraft tyres
•
Aircraft structural parts & avionics
•
Aircraft Oil and Lubricants
•
Services from foreign venders
•
Paints used in aircraft
•
Aircraft carpets and fabric
•
In-flight entertainment hard & soft materials
•
Hangar equipment, tools, fixtures and test benches
•
Ground Support Equipment
•
Tools, testers and equipment for support shops
•
Special purpose vehicles like cherry lifters, scissors lift, etc
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Taxes / Duties/ FBR
Taxes and Duties on Air Travel *
1. Taxes and duties on domestic air travel in Pakistan is 22% which is significantly
higher than India 4% and Malaysia 3%, which needs to be rationalized.
2. Taxes and duties on International air travel in Pakistan is 21% which is
significantly higher than India 9% and Malaysia 3%, which needs to be
rationalized.
* Source: IATA Certified information
Meal uplift taxation
• PCAA has imposed charges on meal uplift for passengers despite the fact that it charges
airport/infra structure charges from passengers. This separate tax on passenger meals
should be withdrawn at the earliest.
Because of high taxes, domestic market has been stagnant
since 2006
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Taxes / Duties/ FBR
Recommendations
1. Pakistan CAA charges should be in PKR instead of USD. Civil Aviation of all
countries are charging fee and taxes in their local currencies whereas Pakistan
Civil Aviation is charging in USD. It is suggested that all charges for domestic and
international flights should be charged in Pak Rupees by PCAA across all airports.
Certifications of aircraft and licenses fee as well as other charges by PCAA to
Pakistani operators, design and manufacturing organizations, should be in PKR
and not in USD.
2. Charging Air Navigation charges under separate head by PCAA should be
discontinued.
3. TA / DA rates for travel of PCAA staff charged to Pakistani operators should be as
per government approved policy.
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Taxes / Duties/ FBR
Recommendations
Comparative Other Charges (International)
Aircraft
Karachi
Lahore
Islamabad
Dubai
Beijing
Kualalumpur
Boarding Bridge
Boeing 777-300ER in
USD
188
183
300
152
57
21
• It is suggested that PCAA should immediately reduce boarding bridge charges by 75% at
Islamabad and by 50% at other stations.
• Boarding bridge charges in Pakistan are highest in the region. Many countries do not even charge
for it, often these charges are embedded in landing charges.
• In addition to the Terminal Navigation Charges being charged by PCAA, it is also charging Air
Navigation Charges on international flights landing and departing from Pakistan; which no other
country is charging in the region. Every international flight of airlines of Pakistan has to depart
and land in Pakistan and these high charges are making cost of doing business un-competitive for
airlines of Pakistan.
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Taxes / Duties/ FBR
Recommendations
1.
Taxes and duties on domestic air travel may be exempted (tax holiday) for a period of first five
years of the policy to promote domestic air travel. After the holiday period, total taxes and fees
should not be more than 10% of the fare charged.
2.
FED on Domestic air travel and cargo should be reverted to sales tax mode immediately as
previously charged. This will enable national airlines to adjust GST paid on their domestic
supplies and fuel etc.
3.
As an alternate, GST on fuel and other items consumed for domestic flights may also be
exempted as in the case of international flights.
4.
Aerobridge charges of PCAA to be brought in line with regional charges.
5.
Landing charges at all airports in Pakistan should be reduced by at least 50% to be brought in
line with the region so national airlines can also be competitive.
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(iii) Fuel
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Fuel
Fuel supply through fueling companies shall not be monopolized for any category of fuel. At Multan, Lahore and
Peshawar and now also Islamabad ,where PSO has a monopoly, fuel is being given at a rate of 540% to 820% higher than
KHI where there are two suppliers.
Location
Remunerations Per
Ltrs in PKRs
Fuel Vendors
Available
Percentage as
Compared to KHI
KHI
0.95
PSO, Shell
100%
ISB (Old)
0.80
PSO, Shell
84%
ISB (New Airport)
2.40
PSO
253%
LHE
5.17
PSO
544%
MUX
4.78
PSO
503%
PEW
7.87
PSO
828%
At NEW ISB airport Shell is not available and the remuneration / service charges has been increased from 0.80 to 2.40.
Exorbitant monopoly charge by PSO must be addressed at the earliest,
even before the implementation of the new policy.
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(iv) – Primary & Socio Economic Routes
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Primary & Socio Economic Routes
Proposed Categories of Routes
1. Trunk Routes : Karachi, Lahore, Islamabad, Peshawar and Quetta.
2. Primary Routes: Multan, Faisalabad, Sukkur, Sialkot, D.G. Khan, Rahim Yar Khan and
Bahawalpur.
3. Socio-Economic and Socio-Political Routes : Skardu, Mohenjodaro, Zhob, Saidu Sharif,
Dalbandin, Bannu, Parachinar, Sehwan Sharif, D.I.Khan, Hyderabad, Ormara, Khuzdar,
Rawalakot, Muzaffarabad, Chitral, Gilgit, Panjgur, Gwadar, Turbat, Jiwani, Pasni,
Jacobabad Nawabshah and Mirpur Khas.
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Primary & Socio Economic Routes
Recommendations
Compensation for Operating Primary & Socio Economic Routes
It is proposed that Pakistani scheduled air carriers to operate 10% of their total capacity — Available
Seat Kilometers (ASKs) on Primary Routes and 5% on Socio Economic/Political routes.
Since it is the government’s responsibility to provide air connectivity to the Secondary & Socio
Economic/ Political Routes therefore it is proposed that the government must waive off the
operational taxes/charges/levies and fees related to operation on these routes for the carrier(s) that
operate on these routes, and government/PCAA to compensate the carrier(s) operating on these
routes by royalty payment from non operating carriers, to be determined through a mechanism
jointly developed by PCAA and operators of Pakistan.
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(v) MRO
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Recommendations
MRO
Pakistan has the potential to become a regional MRO hub due to availability of basic infrastructure, its low cost,
favorable geographical location, availability of technically skilled aviation personnel. However, due to law and
order situation, Pakistan falls under War Risk which makes it challenging for our local MROs to compete with its
foreign competitors. It is therefore recommended that:
•A clear policy be defined for aircraft manufacturing, design and MROs.
Similar facilities and tax concession be given to local aircraft manufacturing, design and MROs, as are available in
Gulf/UAE/Middle and Far East. For example, in Singapore, 100% tax reduction offered for up to 15 years to
companies offering aircraft manufacturing, design and MRO services. In Thailand, MRO industry enjoys import
duty exemptions, corporate income tax duty exemptions, double deduction on utility expenses, deductions for
infrastructure costs for specific activities in aerospace, which includes manufacture, design and repair of aircraft
parts, design/manufacture of aerospace devices, repair of onboard devices, as well as tax exemptions on MRO
training institutes.
•MRO and Aviation Manufacturing sector should be declared as industry with following features:
Free Port Zone: Pakistan Aeronautical Complex KAMRA, KHI LHE & ISB airport areas within the boundary of
aerodromes to be declared tax free port zones.
Investment Incentives: MRO/design/manufacturing concerns to be provided land at nominal charges for foreign
investment in MRO by JV/partnership with Pakistani organizations.
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MRO
Recommendations
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Local tax holiday for 10 years to MRO business
Duty / tax free import of aircraft parts, material and equipment
Duty / tax free import of equipment and material for infrastructure development
One-stop-shop, same day plus 24/7 facility for custom clearances (spares & outside party
jobs)
Provisioning of uninterrupted power supply
Negligible CAA parking charges (up to two weeks) for an aircraft coming for maintenance at
MRO facility
Rebate to MRO / design/ manufacturing concerns on all payments to government
authorities (e.g. regulatory charges, fuel, electricity, etc.)
Customs rules be rationalized and made exclusively for MRO / manufacturing business to
grow.
Customer and commercial oriented outlook of PCAA for facilitating enhancement in safety
standards of MRO / design / manufacturing industry.
Companies engaged in aircraft maintenance / design / manufacturing should be entitled to
investment tax credit up to 50% in respect of capital expenditure incurred.
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MRO
Recommendations
Airworthiness
• European Aviation Safety Agency (EASA) is Competent Authority for Approved Maintenance
Organizations (AMOs) under Part 145. It has issued a separate set of User Guides for all Foreign
AMOs over and above the requirements mentioned in EASA Part 145. These regulation includes
guidelines for preparation of the Maintenance Organization Exposition (MOE), Certifying /
Support Staff requirements, Use of Tools / Equipment, restricted Parts fabrication & Composite
repair Workshop requirements, Training Booklets for B1 / B2 certifying staff etc.
• Pakistan Civil Aviation Authority (PCAA) has issued regulations based on The Foreign
Organization User Guides of EASA, over and above the basic regulations. This action from the
PCAA is drastically increasing the maintenance costs for airlines / MROs making it difficult to
maintain the approval scope (s) of their AMO. The User Guides issued by the EASA are only
applicable to Foreign AMO and do not apply to European AMOs working within the vicinity of
European Union who only have to follow the basis regulation.
• It is therefore suggested that these extra requirements be reviewed. The National Policies be
relaxed by ensuring that intent of basic regulation i.e. ANO-145 is not compromised - in
consultation with the industry stake-holders i.e. Airlines & AMOs.
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(vi) Wet Lease / Aircraft Age
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Age of Aircraft
Recommendations
1.
As a first step,
(a) Calendar age of all types of passenger aircraft including wet lease, operated by Pakistani
operators shall not be more than eighteen (18) years at the time of induction.
(b) Aircraft older than twenty five (25) years, being operated by Pakistani operators, including non
RPT operators utilizing aircraft for commercial passenger service, shall not be allowed to
continue operations in Pakistan.
2.
At the next stage,
a) Pakistan CAA is urged to consider the Aircraft Manufacturer’s principle of limit of validity (LOV),
the safe operational life of Aircraft calculated in terms of Flight Hours (FH) and Flight Cycles (FC)
for determining the age and air worthiness of the aircraft being considered for induction.
b) The Aircraft at the time of induction should have minimum 35% of its operational life
remaining” based on LOV calculations of the manufacturer.
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Wet Lease
Recommendations
1. Temporary induction of foreign registered aircraft on wet lease may be
permissible up to maximum of 180 days, extendable on the discretion of
DGCAA.
2. The crew/staff of lessor may be required to obtain Business Visa instead of
work visa.
3. The licenses of foreign crew would be validated for a maximum of 365 days as
long as they are associated with a Wet Lease of an aircraft.
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on NAP
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(vii) Paid Up Capital / Equity
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Paid Up Capital / Equity
Recommendations
1. The economic health of the airlines is under constant surveillance by the PCAA, therefore, the
additional burden of maintaining loss free paid-up capital or negative equity should be waived
off.
2. The Highest value License should cover lower value Licenses for Paid Up Capital and Bank
Guarantee in the same Class. For example: If an operator gets charter license (international)
then it should be deemed to have been granted charter license (domestic) without separately
applying for it.
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(viii) Infrastructure / Security / Safety
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Infrastructure
Recommendations
1.
Airport Development Authority (ADA): The airports should be developed and managed separately by
the creation of a separate body “The Airport Authority of Pakistan” and the regulator “PCAA” should
be responsible for regulating ADA . Development of transit lounges for 6th freedom traffic, to be
supported by transit visa facility
2.
Up gradation of facilities at secondary airports .
3.
ILS CAT II/III/III B installation where necessary to ensure uninterrupted operations.
4.
All alternate airports including Nawabshah to be equipped for wide body operations and night
landing to handle diversions.
5.
Runway extension where necessary for aircrafts to operate at full payloads.
6.
Land at airside and landside should be allocated to operators and direct allied businesses at reduced
rates.
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Security
Recommendations
TSA clearance - Pakistani Airports
Pakistan CAA in coordination with the relevant authorities, must ensure that
all airports in Pakistan meet the minimum security standards as stipulated by
Transportation and Security Administration (TSA) of USA enabling operators
from Pakistan to operate direct flights between points in Pakistan to US.
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Safety
Recommendations
Safety Investigation Board (SIB)
ICAO has defined responsibility of states* in case of an accident:
• State of Design. The State having jurisdiction over the organization responsible for the type design.
• State of Manufacture. The State having jurisdiction over the organization responsible for the final assembly
of the aircraft.
• State of Occurrence. The State in the territory of which an accident or incident occurs.
• State of the Operator. The State in which the operator’s principal place of business is located or, if there is
no such place of business, the operator’s permanent residence.
• State of Registry. The State on whose register the aircraft is entered.
• And the International Civil Aviation Organization, when the aircraft involved is of a maximum mass of over
2 250 kg.
Recommendations:
• In case of Pakistan the above responsibilities devolve to PCAA which should establish an independent body
or Commission. The commission must be totally independent of operators, regulators and policy making
areas.
• At the moment, the work force in SIB is not deputed permanently and gets rotated after a few years
therefore, owing to the seriousness of the job, only ICAO accredited human resource must be employed on
a permanent basis with experience in aircraft accident investigation.
*Page 18 of Annex 13 To the Convention on International Civil Aviation Organization
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Safety
Recommendations
Safety & Quality Assurance recommendations
• Use the term Positive Safety Culture Ref. DOC 9859 SMM
• Under aviation safety perspective focus, must also include [Ref. PCAA Regulations]
• Cargo Safety, Safe Ground Handling and
• Certification of FOOs, Load Controllers, Aviation Instructors and Key-Post holders.
• All VFR aerodromes to be converted to ILS.
• State should recognize and promote adoption of Internationally recognized management system
standards
• ISO9001, PHSAS, IOSA, BARS - Economic Subsidies
• Establishment of a National Safety Review Board. (To ensure continuous monitoring of safety
performance of all aviation concerns including regulator, operators, manufacturers, training
institutes and other service providers)
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Safety
Recommendations
Formulation of National Safety Review Board
• National Safety Review Board shall:
• Be independent body under Prime Minister
• Have representation from all aviation concerns
• Chaired by a competent individual nominated by the PM who is independent of aviation
concerns, have substantial aviation experience, necessary IATA ICAO Safety certifications and
a good repute.
• Carry out continuous Safety Performance Review on behalf of the State of Pakistan.
• Supervise aviation related research projects
• Supervise aviation training programs/institutions
• Provide a platform for all stake holders to share concerns and feedback.
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(ix) Cargo
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Cargo
Recommendations
1. To promote exports of the country, a dedicated classification should be made for cargo only operators.
2. A separate classification should be made for Cargo Only Operators.
3. Paid-up capital, deposits, etc. should have lower limits for those wishing to operate an All Cargo Airline.
4. Pakistan CAA to ensure establishment of dedicated cold chain and perishable facility at all major
domestic airports as Public Private Partnership arrangement.
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(x) Charter and Scheduled Commuter Operations
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Recommendations
Charter and Scheduled Commuter Operations
The Policy should incentivize startups by providing relief in certain areas such as taxes, infrastructure etc. during their infancy years and
gradually bring them at par with others.
Charter Class II operators should be designated as Commuter Airlines permitting them to operate between Primary, Secondary and Socio
Economic Routes. This will greatly facilitate our rural areas connectivity with the rest of the country, improve opportunities for commerce
and industry, create new opportunities for employment and countless other openings to this segment of our population which is most in
need. This will also reduce if not eliminate the need for main stream airlines to operate on routes otherwise unfeasible with their
current aircraft fleet.
1.
The license fee for the Pakistan CAA spaces on apron side and in the airport office complexes should be at a reduced rate for a new
start-up and this rate should be extended for at least first year of operations as charging a new start-up at the same rate as an
operator already in service gives the latter a competitive price advantage.
2.
Scheduled commuter service should be exempted from Pakistan CAA embarkation fee, federal and provisional taxes and duties for
at least initial 03 years or discounted charges be considered.
3.
Primary and Secondary routes may also be included in schedule commuter services under charter license specially for those routes
where there is no service or are under served.
4.
The condition to wait for 2 years before an application can be considered for conversion from Charter class 2 (CHTL2) to RPT be
reduced to 6 months of successful operations and subject to only increase of Paid Up capital and increase in number of aircrafts
while meeting all AOC requirements for RPT.
5.
PCAA to facilitate work visas & security clearances for foreign Instructor pilots, engineers and cabin crew instructors to start the
initial operations. In order to support such operations, PCAA may be designated as the centre point for decision making to facilitate
the operators.
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on NAP
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(xi) Flying Clubs and General Aviation Operators
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Recommendations
Flying Clubs and General Aviation Operators
1. Flying clubs, aerial work & private operators should be treated separately in the National Aviation Policy.
2. Bank Guarantee to be removed for aerial work and flying school license. Security deposits to be limited for 06
monthly billing cycle.
3. Removal of requirement of paid up capital for flying clubs as they have no ownership and have no substantial
earnings. If the Flying Club wants to get a License for Charters or Aerial Work License only then they should be
allowed to acquire the Paid Up Capital and security deposits.
4. Security deposits to be fixed at 10% of the land rentals. This must be calculated only on open-space-basis, with
an annual rental increase of 10%.
5. PPL Examination should be simplified on the pattern of FAA 01 Paper to encourage more people to obtain the
PPL license and buy aircraft for personal use.
6. Security clearance of student pilots to be simplified and clearance to be obtained in less than 45 days.
7. Pilots in general aviation should be allowed to act as PIC on 2 types of equipment in above 5700 kg and all
ratings below 5700 kg to remain valid subject to flying currency / simulator check.
8. Simulator recurrent to be once every 12 months instead of 6 months.
9. Airports should have separate passenger handling facility for general aviation operators. Responsibilities for
Active / Passive Security measures inside the Airport premises should be exclusively that of ASF / CAA. GA
Operators may be assigned responsibilities of 2nd line passive security measures specific to their respective
premises only
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1.
Recommendations of Pakistani Operators and Aircraft Manufacturers on NAP
(xii) Aircraft Manufacturing
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Aircraft Manufacturing
Introduction:
Aircraft Design and Manufacturing is a high technology and cost intensive industry that takes decades to
mature. World over establishment and growth of this industry is dependent on support and patronage of
the Government. However, once matured it is known to make sizeable contribution to the national GDP
through earnings/savings in foreign exchange.
Vision:
To support /encourage Private Sector Aircraft Manufacturing Industry for achieving self reliance in the field
of Aviation
Objective:
I.
To Create investment friendly environment for developing Aircraft Design/Manufacturing
Industry
II.
To encourage growth of Aircraft Design and Manufacturing in Private Sector
III.
To build indigenous Aircraft commencing from light to medium to heavier aircraft
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Aircraft Manufacturing
Challenges:
This nascent industry is facing multiple challenges for fresh raisings and future growth. Salient features are:
I.
Lack of Policy Framework. NAP 2015 is virtually silent on the subject, resulting into lack of interest
and even awareness in both, private sector & ministries. In the present situation there is very little
investment in indigenization of aviation technologies compelling the aircraft operators to rely on
expensive foreign suppliers even for minor requirements. Pakistan is also missing out on invaluable
savings in FE and opportunity to create high technology jobs.
II. Lack of Patronage by the Government & incentives for the investor. GoP needed to patronize this
vital industry and create a conducive and investor friendly environment, that would help in national
growth and job creation in high technology field.
III. Over Regulation. Present PCAA regulations are suppressive rather than supportive to the industry
and its growth.
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Aircraft Manufacturing
Recommendations
1.
Aircraft Manufacturing to be considered an Industry, rather than a commercial organization.
2.
In order to promote and protect local aircraft manufacturing industry, the locally produced aircraft ( along with its variants) are granted
first right of refusal.
3.
The list of import items exempted from all import duties and taxes should include raw materials imported for manufacturing of aircraft,
equipment required for design/manufacturing of aircraft, including aircraft design/manufacturing infrastructure expansion imports and
parts, components, assemblies and/or systems imported for integration onto Pakistani manufactured aircraft.
4.
Tax holiday should be granted to Aircraft Manufacturers for 20 years. Aircraft Manufacturing Industry to be included in the list of
industries authorized to receive research and development (R & D) grant from the government of Pakistan
5.
The Land Lease Agreements of aircraft manufacturers should have a term of minimum 20 years at nominal rates, extendable every time
to another 20 years, at the end of the period with the consent of the industry. All utilities to be provided to Aircraft Manufacturers at
reduced industrial rates defined by Government of Pakistan rather than Commercial Rates of CAA, with all taxes exempted.
6.
Aircraft manufacturing / design Industry once approved by the SECP and PCAA, the approved organization for aircraft design/
manufacturing should not require annual renewals; instead will be audited technically every five years. Non-conformances and
observations pointed out during the audit are to be rectified within specified time.
7.
It is suggested that “Aeronautical Publications” i.e. books, and trainings available on Digital Medium (DVD’s, CD’s, and Audio Video Tape)
should also be exempted of all taxes and the term Aeronautical publications should be elaborated to include the same.
8.
The NOC issuance process for import of raw materials, parts, components and systems both at Ministry of Aviation and PCAA shall be
completed within four weeks with entire process transparent to the clients with online traceability at the portal. If no response received
within stipulated period, the demand be deemed as approved.
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Aircraft Manufacturing
Recommendations
9. As per PCAA ANO, cost of raising a fresh design organization is very high and is in USD. The same be rationalized in Pakistani
Rupees.
10. A clear direction should be adapted for design / manufacturing rule set as the current implementations of the legislation
are a mixture of FAA/ EASA/ CASA and CAA UK. The Manufacturers should be taken in confidence and should be a part of the
revision process of each legislation effecting them.
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Aircraft Manufacturing
Recommendations
Exemptions:
9. List of equipment exempted from all import duties and taxes should include a new section under the name of “Aircraft
Manufacturing/ Design related Equipment”, and should include the following items:
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
Equipment required for aircraft manufacturing.
Raw materials imported for manufacturing of aircraft or aircraft parts.
Molds, jigs, fixtures imported for manufacturing of aircraft parts or aircraft.
Precision laser cutting equipment used in composite parts.
N-axis CNC machines for engine parts manufacturing.
3D Scanners, 3D Printers and CMM machines.
Non-Destructive testing machines.
Aircraft Manufacturing related tools, dies and fixtures
Materials imported for Infrastructure growth.
10. a) Display System (FIDS) is often mentioned generally in CAA policies and does not specify various systems that fall under it; thus causing
ambiguities and delays during custom clearance. It is suggested that the term Display Systems should be elaborated to include Electronic Flight
Information Systems (EFIS), Engine Management System (EMS), Wide Area Augmentation System (WAAS), Weather Information Systems (WIS)
and IFR panels
b) Similarly, Rescue and Firefighting Emergency Equipment which is already tax free, should also include Emergency Locator Transmitters
(ELT), Ballistic parachute Recovery System (BRS), Emergency Medical Kits (EMK), ADS-B and GPS / DGPS equipment.
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General Recommendations
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General Recommendations
1.
PCAA functions as a regulator and service provider to be delinked as it creates a conflict of interest for PCAA.
PCAA as a regulator to be looked after by the Government in order to ensure the role is not commercially driven.
2.
Procedure for payments of Aircrafts inducted by all operators to be simplified especially with reference to smooth transfer out of
USD to LESSOR/SELLER.
3.
Imposition of age restricted duties on ground handling equipment must be rationalized and relaxed for fully refurbished equipment
older than 05 years.
4.
An institute with affiliation to foreign/internationally reputed organizations, IST (institute of space technology), Islamabad
considered. For a quick solution, IST may be given the status after getting due recognition by MOA/PCAA.
5.
Type Training for CAA Inspectors Flight Standards and Airworthiness to be stopped. If the facility is approved by the OEM / CAA of
that respective Country then their facility and Simulator Check Reports should be accepted by CAA Pak.
6.
CAA License conversion to be 1 Paper Revalidation only. Whether the license is from ICAO, FAA, EASA, GCA or any Contracting State.
7.
CAA Licensing to preferably work under Directorate of Flight Standards (DFS) or in close coordination with DFS.
8.
Air Navigation Order (ANO) should be amended by a Council, not an individual. Council may consist of the members from
stakeholders group. In case its regarding General Aviation, then members may be taken from this group only if the ANO is supposed
to affect them. Before approving ANO; comments and observation should be sought from respective operators.
9.
An advisory committee comprising members from all aviation stake holders of Pakistan be formed to advise PCAA board on
formulation of policies.
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Expenses
for
can be
60