Page 56 - Forbes India (December 2015)

real issue

aviation policy

Onwards

and Upwards

The government’s draft civil aviation policy plans
to provide concessions to airlines to fuel growth,
and make flying affordable for the masses

By Anshul DhAmijA

he Tata SIA Airlines Ltd’s Tata SIA Airlines Limited, agrees: “It
research report on the is a fairly comprehensive approach
contribution of aviation that will help unleash the potential
T to the Indian economy of the aviation sector in India.”
makes lofty projections about the For the first time, the policy
sector: It believes civil aviation in talks of concessions for airlines
India has the potential to create an to fuel growth. Some of the fiscal
economic value of $250 billion and concessions include service tax
contribute to around 5 percent of the and customs duty exemptions for
country’s GDP over the next 10 years. various sub-sectors of the aviation
The report also foresees a three-fold industry, and exemption from paying
rise in domestic air traffic by 2025. various airport-related charges.
There is a yawning gap between There is also talk of providing free
the projections and the ground land for the development of airports.
realities (the sector is valued at In fact, the government is looking at
$16 billion as of FY2015), but if building “no-frill” or low-cost airports,
the latest National Civil Aviation which could give a fillip to air travel
Policy (NCAP) draft is anything to in smaller towns. (Currently around
go by, the government seems to be 75 out of 476 airstrips/airports in
pulling its socks up to bridge it. India have scheduled operations.)
The draft policy, which was “This industry has been known to be
recently placed in the public like a cash cow for the government,
domain to invite feedback from the so it’s good to see concessions being
stakeholders, lays emphasis on 16 talked about,” adds Bhargava. clearly spelling out its objective:
critical areas of the civil aviation The draft also has the government To make flying affordable for the
industry ranging from safety to masses. “For example, if every
regional connectivity, bilateral traffic Indian in the middle-class income
rights, maintenance, repair and THE DRAFT bracket takes just one flight per
overhaul operations, fiscal support and annum, it would result in a sale of
air navigation services, among others. AVIATION POLICY 300 million tickets, a big jump from
Says Jitender Bhargava, former PROPOSES TO CAP the 70 million domestic tickets sold
executive director of state-run Air in 2014-15. This will be possible if the
India, “It is the best draft policy in FARES AT Rs 2,500 airfare, especially on regional routes,
the last 20 years. It is streets ahead FOR A ONE-HOUR is brought down. The reduction
of others [six other civil aviation FLIGHT ON SELECT in costs will require concessions
policies drafted by past governments], by the stakeholders, primarily the
touching all aspects of aviation.” REGIONAL ROUTES central and state governments and
Phee Teik Yeoh, CEO, Vistara— airports,” reads the draft NCAP 2015.

56 | FORBES INDIA DECEMBER 11, 2015