Page 58 - Forbes India (December 2015)

interview

Ashok GAjApAthi rAju

‘We Will Move on

The 5/20 Rule by End-2015’

The draft civil aviation policy has the potential to revolutionise
Indian skies, says Union Aviation Minister Ashok Gajapathi Raju

By Shutapa paul

Q How will the new aviation policy called on and the airlines will
change the sector in India? participate if they want to.
Aviation has moved, in the Indian
sense, from an elitist activity to a Q How long before the
general one. The composition of draft becomes a policy?
travellers has changed. Since we are It took a long time [to be completed].
a big country, the connectivity should [But] the type of discussions that we
be better. There has been consistent have had with all stakeholders has
demand [to connect smaller towns] never been done before. We need to
and past performances probably have it going before the end of 2015,
do not reflect a correct thinking in so that we can start by March 2016.
choosing locations. It has resulted
in 30-31 airports being inactive. We Q The draft policy has called for
wanted to see how many of these can a review of the 5/20 rule (which
become performing assets, where the mandates that a domestic airline
impediments are, where we would ministers and we solicit their advice. have a fleet of 20 aircraft and flying
like to put in new airports while A lot of interaction [with the states] experience of five years before
not making the same mistakes so has gone into it and that is why our starting international operations).
that airports can contribute to the confidence level is high right now. When will it be scrapped?
economy, and also gain from it. We This is a regulation that is not there
are going [ahead] keeping passengers Q But airlines are not very in any country. To me, it [the 5/20
in mind. There has to be definiteness happy about the Rs 2,500 rule] pulls down Indian players.
[to the policy], say 3-5 years, so that per flying hour scheme... It is a regulation for regulation’s
economic activity can begin as well. What is proposed is a cess of two sake. It is a decision that has come
percent on certain vibrant routes. from the Cabinet. So we need to
Q Do you think if this draft comes This raises certain monies that take it back to the Cabinet.
into effect it will revolutionise will cross-subsidise certain routes By the end of 2015, we should
the aviation sector? that do not have connectivity. be getting everything going.
There’s potential... this kind of activity Those states that want to opt for The Prime Minister gave us two
will help us harness that potential. the scheme can opt for it. The sittings and gave his inputs.
proposal is that the government
Q Are states an impediment to of India will give up its service tax Q Only 75 of the 470-odd airstrips/
implementing this policy smoothly? and excise duty on ATF in those airports in India are operational.
I don’t see any impediment there. The [unviable] areas. State government How do you plan to upgrade/
idea of an hour-long flight at Rs 2,500 reduces VAT on ATF to 1 percent. operationalise airstrips/airports?
has excited some. If it has to work, The Airports Authority of These strips are unutilised assets.
Amit vermA there has to be a certain amount of not charge for landing. [but] some can be salvaged. But
India for those three years will
Few of the strips may be far-gone
sacrifice from all stakeholders, state
we have to start that exercise. We
A transparent procedure has
governments and the government of
can make those strips active.
India… I have written to all the chief
to be followed, where bids are
58 | FORBES INDIA DECEMBER 11, 2015