Mr Jayant Sinha, Minister for State for Civil Aviation, Government of India stated UDAN is slated to create additional 100 airports over the next 2-3 years. The Minister was speaking at the Confederation of Indian Industry’s (CII) Annual Session 2017 themed 'Future of Globalisation: Can India Lead?' being held in New Delhi.
Market friendly schemes such as removing airport and navigation charges, reducing ATF taxes, making routes exclusive for 3 years, etc would incentivize carriers, stressed the Minister. The Ministry is also working with lessors to reduce risk premium. Mr Sinha noted that provided other taxes are paid, ATF taxes can be reduced. An estimated Rs. 3 lakh crores are required for augmenting airport capacity.
The Minister stated that there also exists tremendous opportunity for investment, particularly in relation to transport connectivity to the airports. The Navi Mumbai Airport project aims to build 1 runway and 1 terminal by 2020.
Mr Sinha said that India’s FDI policy is one of the most open in the world. In airline carriers, up to 49% can be foreign stakeholders. He added that the Indian aviation industry is quite competitive and fares are one of the lowest across the world. The Maintenance, Repair and Overall (MRO) business is starting to grow. Bangalore and Hyderabad can become transit hubs for international flights from the neighboring regions.
Air India has valuable assets including planes, international slots and infrastructure, observed the Minister. The Ministry is working on a robust transformation, planning and governance plan for the national carrier, he advised.
Mr Phee Teik Yeoh, Chief Executive Officer, TATA SIA Airline Limited, said that fuel costs have risen over the last year despite falling prices. He added that reducing ATF taxes will help in reducing costs. He requested for creating a few competitive national hubs to become competitive domestically.
Ms Shereen Bhan, Managing Editor, CNBC stated that while the Indian aviation market is one of the fastest growing, it has cycles of growth.
April 28, 2017