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Narendra Modi’s 100-day aviation push focuses on infra

LiveMint logoLiveMint 16-06-2014 Tarun Shukla

New Delhi: The aviation ministry has drawn up a plan to push infrastructure development, e-governance and air connectivity during the first 100 days of the new government, two government officials said.

The aviation sector has been hit by a slump in domestic passengers even as high airport and fuel charges have buffeted airlines with losses running into billions of rupees.

Last fortnight the ministry followed up on a string of consultations to hand over a list of over a dozen action points to the Prime Minister’s Office (PMO)—to be achieved in the next 100 days, a government official said on condition of anonymity.

The ministry is likely to allow Madhya Pradesh’s Indore and Bhopal airports and Chhattisgarh’s Raipur airport to host international flights, which could boost commerce and tourism. The airports will be designated international airports

The ministry will also create a framework for small and low-cost airports, which typically host one or two flights a day, by easing several requirements seen as unnecessary. The aim, said a second government official who too declined to be named, is to reduce costs.

State-owned Airports Authority of India (AAI) has identified 50 airports across the country to be built on the low-cost model. The strategic Port Blair airport is also likely to be modernized, the contract for which will be awarded within 100 days. Prime Minister Narendra Modi’s government was sworn in on 26 May.

Fourthly, the ministry is concerned over air safety in the backdrop of the US Federal Aviation Administration (FAA) lowering India’s ranking this year on grounds of inadequate regulatory oversight.

Air India Ltd and Jet Airways (India) Ltd—the two airlines that fly to US destinations—are not allowed to expand flights and their existing flights are subjected to additional checks as a result of the US move.

The ministry has decided to approach the FAA within 100 days after setting its house in order. The Directorate General of Civil Aviation (DGCA) has hired Washington-based Wicks Group to help. Wicks is expected to submit a report in the next few weeks but will work with DGCA for a year to help set up several safety systems.

Aviation secretary Ashok Lavasa has told regulator DGCA to award an information technology contract for e-governance to digitize most of DGCA’s work and reduce to a bare minimum the interface between the regulator and pilots, engineers and airlines. DGCA has been plagued with charges of nepotism in recent years.

Sixth, DGCA will issue guidelines that allow for longer expiry dates of various licences wherever possible. So, for example, if pilots’ licences are issued to expire in two years, they will now be extended to around in five years or so depending on how DGCA works out the modalities.

Seventh, the ministry will also create air freight stations at several airports across the country to help decongest cargo movement.

The ministry has, however, steered clear of committing to two matters which were close to being cleared by the last government. One is the scrapping of the current airline rule which says you have to have five years of experience and 20 aircraft fleet to fly international routes. The scrapping of the rule is likely to help two new Tata group airlines—AirAsia India and Tata SIA Airlines Ltd— which are starting operations now. “We will be taking that to cabinet,” said the first government official.

The other such matter is a plan to privatize six airports, including Chennai and Kolkata, which have already been modernized by AAI.

The first government official said the issues involved with the privatization model will have to be sorted out first, as there were differences of opinion between the planning commission and aviation ministry on how to draft the airport privatization document.

Air India privatization has been ruled out and the government will try to improve the airline further, the first government official said.

Experts said the government needs to draw up an aviation policy to help the sector grow safely and swiftly.

“The entire value chain needs a deep strategic review to understand structural fault lines and to identify solutions. There should be a civil aviation policy post these reviews within 6 to 9 months,” said South Asia CEO of CAPA Kapil Kaul. He advocated “a policy which is well thought out, practical and aligned to the short, medium and long term industry needs”.

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