Some outstanding issues of the aviation industry remain unresolved, like ATF prices. Operators say that with ATF prices as they are, it would be difficult to maximise output, revenues and efficiency. What are your views? Fuel alone accounts for more than 40% of the total operating cost for airlines in India. ATF rates for domestic operations in India are 60-70% higher than international benchmark. This high price of ATF is contributing to the large losses that are being incurred by the Indian aviation industry. Recently, I and senior officials from the civil aviation ministry have met Finance Minister P. Chidambaram and requested him to give some concessions in the next Budget. We have asked him to consider giving ATF the status of ‘declared goods’, and reducing customs and excise duty on ATF.
Some private players are upset at what they call ‘old and archaic’ rules that govern the aviation industry in India. They say it is a hindrance to growth. Do you intend to bring about changes or significant amendments?
In past three-and-a-half years, the rules of aviation industry related to the government have undergone a sea change. Various amendments have been made. There have been changes in airport infrastructure rules – a new, airport infrastructure policy will soon be in place. FDI policy in various departments of aviation has been changed – the economies of scales will now justify huge investment in areas like MROs, jet engine shops, cargos, ground handling. India will be the fourth in the world to install satellite navigation system enabling handling of higher volumes of air traffic safety, a merger and acquisition policy has been put in place to facilitate consolidations in the sector. The new civil aviation policy is under the consideration of the government, a ground handling policy has been formulated in every sector of aviation.
Finally, how do you see the aviation sector in the immediate future, let’s say at the end of this decade?
The government has put in place the merger and acquisition policy to aid the mergers and the consolidation taking place in the sector. The government has plans to scale up the air cargo business in the country as well as helicopter operations. The Indian aviation sector will be one of the major drivers of the economy in the near future. It is expected to bring in investments to the tune of $115-120 billion. Besides being one of the top sectors for investment, it would also be one of the top sectors for employment generation where the air traffic is expected to growth at the rate of at least 25% for the next 10 years; by the end of 2008, there should be at least 100 airports in the country and this number will only grow because India needs at least 400 airports across its length and breadth.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
Some private players are upset at what they call ‘old and archaic’ rules that govern the aviation industry in India. They say it is a hindrance to growth. Do you intend to bring about changes or significant amendments?
In past three-and-a-half years, the rules of aviation industry related to the government have undergone a sea change. Various amendments have been made. There have been changes in airport infrastructure rules – a new, airport infrastructure policy will soon be in place. FDI policy in various departments of aviation has been changed – the economies of scales will now justify huge investment in areas like MROs, jet engine shops, cargos, ground handling. India will be the fourth in the world to install satellite navigation system enabling handling of higher volumes of air traffic safety, a merger and acquisition policy has been put in place to facilitate consolidations in the sector. The new civil aviation policy is under the consideration of the government, a ground handling policy has been formulated in every sector of aviation.
Finally, how do you see the aviation sector in the immediate future, let’s say at the end of this decade?
The government has put in place the merger and acquisition policy to aid the mergers and the consolidation taking place in the sector. The government has plans to scale up the air cargo business in the country as well as helicopter operations. The Indian aviation sector will be one of the major drivers of the economy in the near future. It is expected to bring in investments to the tune of $115-120 billion. Besides being one of the top sectors for investment, it would also be one of the top sectors for employment generation where the air traffic is expected to growth at the rate of at least 25% for the next 10 years; by the end of 2008, there should be at least 100 airports in the country and this number will only grow because India needs at least 400 airports across its length and breadth.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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