Civil Aviation Minister outlines to PM hurdles to sector’s takeoff
22 Jun 2014 11:05 PM GMT
Civil Aviation Minister Ashok Gajapathi Raju on Saturday briefed Prime Minister Narendra Modi on crucial issues facing the aviation sector like building of airports at non-metro cities, slashing of taxes on jet fuel and turning around the ailing Air India. A detailed presentation is understood to have been made on the issues which also included downgrade of India’s safety ranking by US regulator Federal Aviation Administration (FAA) and review of the rule requiring an airline to have flown domestic for five years and having a 20-aircraft fleet, before it could be allowed to fly abroad.
The previous government was actively considering scrapping this rule on the grounds that an airline would have to first establish itself domestically before it could be allowed to fly abroad. This issue would be crucial to start-up carriers like AirAsia India and Tata-SIA Airlines who would want to launch international flights as soon as they can.
Among other major issues raised were steps to encourage states to slash high sales tax rates on jet fuel, quick passage of the Civil Aviation Authority Bill giving the much- needed autonomy to the new aviation regulator and making India a hub of aircraft engineering facilities by helping Maintenance, Repair and Overhaul (MRO) units. It is believed that Air India’s turnaround and financial restructuring plans and equity infusion in it was also in focus. The national carrier is seeking infusion of Rs 8,000 crore this financial year — Rs 5,500 crore for 2014-15 and Rs 2,500 crore as the shortfall in committed equity infusion in 2013-14.
On improving air connectivity in non-metro cities, the Modi government has already made it clear that it would focus on construction of low-cost airports in such places to deepen the penetration of air connectivity. Another major issue would be the stalled process of modernising six airports, including those at Chennai and Kolkata, which were initiated and then halted by the previous government.
Development of 50 no-frill airports by the Airports Authority of India in several states and greenfield airports are slated for development in Navi Mumbai, Juhu, Goa, Kannur, Pune, Sriperumbudur, Bellary and Raigarh are also part of the unfinished tasks of the erstwhile UPA-II government.
The previous government was actively considering scrapping this rule on the grounds that an airline would have to first establish itself domestically before it could be allowed to fly abroad. This issue would be crucial to start-up carriers like AirAsia India and Tata-SIA Airlines who would want to launch international flights as soon as they can.
Among other major issues raised were steps to encourage states to slash high sales tax rates on jet fuel, quick passage of the Civil Aviation Authority Bill giving the much- needed autonomy to the new aviation regulator and making India a hub of aircraft engineering facilities by helping Maintenance, Repair and Overhaul (MRO) units. It is believed that Air India’s turnaround and financial restructuring plans and equity infusion in it was also in focus. The national carrier is seeking infusion of Rs 8,000 crore this financial year — Rs 5,500 crore for 2014-15 and Rs 2,500 crore as the shortfall in committed equity infusion in 2013-14.
On improving air connectivity in non-metro cities, the Modi government has already made it clear that it would focus on construction of low-cost airports in such places to deepen the penetration of air connectivity. Another major issue would be the stalled process of modernising six airports, including those at Chennai and Kolkata, which were initiated and then halted by the previous government.
Development of 50 no-frill airports by the Airports Authority of India in several states and greenfield airports are slated for development in Navi Mumbai, Juhu, Goa, Kannur, Pune, Sriperumbudur, Bellary and Raigarh are also part of the unfinished tasks of the erstwhile UPA-II government.
The new government would also have to take urgent steps towards restoration of the top Category-I
status of the country’s safety mechanism, which was downgraded to Category II by the US aviation regulator in January.
status of the country’s safety mechanism, which was downgraded to Category II by the US aviation regulator in January.
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