Aviation policy to ease business

14 Oct Aviation policy to ease business

The Aviation Day hosted by IATA, Ministry of Civil Aviation, and the Confederation of Indian Industry (CII), brought into focus the areas of opportunities, as also the multiple challenges that need to be addressed.

India’s 5/20 rule was a popular topic of discussion at the Aviation Day conference.Phee Teik Yeoh, CEO, Vistara, called for the abolition of the rule mandating five years of domestic operations and fleet of 20 aircraft for airlines to fly international, and route dispersal guidelines. Tony Tyler, Director General and CEO, IATA, said, “The problem with such regulations is that by creating distortions to the free market, they influence long-term decisions made by airlines. And so, once they are imposed they become very difficult to change as circumstances evolve, because doing so can’t help being unfair to some or the other key industry player.”

However, Pusapati Ashok Gajapathi Raju, Minister of Civil Aviation, said that instead of opposing the easing of the 5/20 rule, existing players on the international route must use existing bilateral allotted to them. Raju was addressing a gathering of senior airlines executives, officials from the Civil Aviation Ministry and Directorate General of Civil Aviation (DGCA), as well as aviation industry experts at the Aviation Day India, organised by IATA, India’s Ministry of Civil Aviation (MoCA) and the Confederation of Indian Industries.

Delivering the keynote address at the conference, Tyler called for the development of a comprehensive policy for aviation aligned with the Indian Government’s stated intention to make it easier to do business in India.

On the ministry’s highlyawaited aviation policy, Raju said that the new policy would bolster growth and ease the investment climate. He said that while the aviation sector
would continue with the regulations, the rules would be amended for the growth of the sector. Replying to a question, Raju also said that at the moment government has put low-cost airport projects on hold due to feasibility issues.

Talking more about the aviation policy, RN Choubey,Secretary, Civil Aviation, said that the aviation policy would look to reduce cost of acquisition of aircrafts and airports, they would also work more closely with states and moderate taxes on ATF at the state level. “We are working to see that all states can bring down the VAT rates to four per cent on ATF. This is crucial as India has to import crude oil and moderate fuel prices are a key component to making the industry competitive,” he said.

Choubey mentioned that the aviation policy has touched upon all the concerns of the industry, “The government is looking at various ways to reduce cost of operations for the airline, including ways to order for aircraft in bulk for all Indian carriers together. We are thinking on these lines and a final decision will come after consultations,” he said.