Page 57 - Forbes India (December 2015)

we will save a lot of money,” he says.
Greenfield airports don’t allow
airlines to undertake their own ground
handling operations, but insist that
they avail the services of third-party
operators who are concessionaires
at the airport. “Over and above our
ground handling charges, we stand
to lose 14 percent as service tax and
another 13 percent as royalty payable
to the airport operator,” adds Thomas,
whose ground handling services
company Decor Aviation operates
across 13 airports in south India.
Another sore point with newer
airlines is the ambiguity over the 5/20
rule, which allows Indian carriers to fly
abroad only after completing five years
of domestic operations and having a
fleet of 20 aircraft. The draft NCPA
2015 has proposed three options:
Abolish the rule; continue with it; or
introduce the concept of Domestic
Flying Credits based on which Indian
careers will be allowed to fly overseas.
“It was surprising to see the lack
of clarity or progress on the 5/20
rule. This is one significant, archaic
and regressive policy that would
have unbridled the entire sector and
shown optimism not only to current
incumbents but also to potential future
investors in the sector,” says Mittu
The national Civil Aviation
Policy draft lays emphasis Chandilya, CEO & MD, AirAsia India.
on 16 critical areas of the The Tata-SIA research report notes
civil aviation industry
that there are no “global parallels
to this rule” and goes on to term the
The first vision statement in the managing director of Air Pegasus, regulation as being “discriminatory”
draft NCAP 2015 speaks of creating which operates a fleet of turboprop to Indian airlines. It highlights that
an ecosystem that will enable 30 aircraft in south India. “When you while foreign carriers are allowed to
crore domestic tickets to be sold operate at costly airports such as the operate in Indian skies, Indian airlines
by 2022 and 50 crore by 2027, Kempegowda International Airport, cannot enjoy reciprocal rights.
from the current seven crore. Bengaluru, out of that Rs 2,500 we “The 5/20 rule should be abolished
One of the ideas floated by the may have to spend Rs 1,800 on paying unconditionally and immediately to
government is to cap fares at Rs 2,500 various fees to the airport operator.” benefit India as its removal will spur
(all-inclusive) per passenger for a That apart, Thomas is upbeat about investment, tourism and employment.
one-hour flight on select regional certain other provisions of the draft It will signal a liberal market friendly
routes. While this is a huge leg- policy. “The policy has recommended regime to Indian and global investors,”
up for passengers in Tier-II and that airlines can carry out their own says Yeoh of Vistara. “It is time that
Tier-III towns, regional airlines ground handling operations and need the Indian aviation sector is allowed
aren’t quite excited. “We believe it not be dependent on third-party to reach its full potential by getting Getty imaGes
isn’t viable,” says Shyson Thomas, operators. This will benefit airlines as freedom from restrictive rules.”

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