Page 28 - AAA JULY - AUGUST 2014 Online Magazine

FEATURE CLEAR SKIES

The good news for India’s long The government has allowed flexi and Tata SIA’s operations will be closely
suffering civil aviation sector is that the use of airspace by civil and military watched by others who will need to invest
new government seems to be seized of users. This can help optimal usage of in this growing market. The success of
the challenges the sector faces. A report airspace, enhancing airspace capacity, the new entrants, will only help further
in the HT Mint business newspaper in minimising delays, conservation of fuel expand the market and provide improved
June said that ministry of aviation has and reduction in emissions. services at a lower cost to the travelling
already drawn up a plan to develop According to the Ministry of Civil public! With the two new airlines having
aviation infrastructure, e-governance Aviation (Strategy Plan 2010-15) “It is successfully navigated their way to
and air connectivity during the first 100 anticipated that by 2020 a total of $80 turbulent skies, it appears that clear
days of the new government. billion would be required to fund the skies are indeed ahead!
The existing airports at Indore and fleet requirements of the commercial
Bhopal in Madhya Pradesh and Raipur in airlines, $30 billion for airport systems
Chhattisgarh are likely to be designated and additional $100 million for up-
as International airports. The article also gradation of Air Navigation Systems.
mentions the Port Blair airport is likely These funding needs can only be through
to be modernised with a contract to be Public Private Partnership and Full
awarded in 100 days. Private participation. Only the airport
The earlier government had taken sector and air controller system needs
steps to liberalise the acquisition of aircraft government support.
by the scheduled, non-scheduled airlines, As can be seen, success in India’s civil
flying institutes and for private use, by aviation sector depends on a number of
taking down the archaic Aircraft Acquisition factors that are beyond the control of
Committee. Airspace congestion also leads an operator. The new airlines will need
to delays, wastage of fuel as aircraft circle to adjust their strategy for a market
the air and reduced turnaround times for that has been bleeding its airlines dry
aircraft which all impact profits. for quite some time now. Air Asia India

INDIA’S CIVIL AVIATION AGENDA: CAPA PROPOSALS FOR THE
NEW ADMINISTRATION TO RESTART THE INDUSTRy

• Notifying ATF as a “declared good”, thereby reducing sales taxation on fuel to
4% from an average of 24% today, would be the single greatest confidence boost
that the government could provide to the industry. This was not possible in the
past because of the nature of coalition governments. Such a move would deliver
an immediate reduction of 10-12% in airline operating costs, representing a
massive impact in such a low margin industry.

• Abolition of the 5 year/20 aircraft rule should be implemented quickly; there
is no justification for persisting with a regulation which discriminates against
Indian carriers, effectively placing them at a competitive disadvantage to foreign
airlines operating into India.
• Restrictions on the ability for airlines to generate ancillary revenue should be
lifted completely.
• The proposed new Route Dispersal Guidelines will introduce even greater
distortions than the already flawed system currently in place, and their
implementation should be shelved until a thorough review of the policy on
remote and regional connectivity is completed.
• The Ministry of Civil Aviation should send a clear signal of its willingness to
partner with the industry, working equitably towards a common goal, as opposed
to the less cooperative relationship that has developed in recent years

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