Airport sector to attract USD 12.1 bn during 12th plan: Ajit Singh

Written by PTI | Hyderabad | Updated: Mar 13 2014, 03:00am hrs
Indian Aviation SectorThe Indian airport sector is expected to attract investments of USD 12.1 billion during the 12th plan period, including USD 9.3 billion from the private sector, Union Civil Aviation Minister Ajit Singh said today. (AP)
The Indian airport sector is expected to attract investments of USD 12.1 billion during the 12th plan period, including USD 9.3 billion from the private sector, Union Civil Aviation Minister Ajit Singh said today.

Singh inaugurated the fourth edition of India Aviation show here, which witnessed one of the biggest aircraft deals being signed between budget carrier SpiceJet and Boeing.

"The government has envisaged an investment of USD 12.1 billion in the airport sector during the 12th plan period (2012-17), of which USD 9.3 billion is expected to come from the private sector for construction of new airports, expansion and modernisation of existing airports and development of low cost airports," Singh said.

Stating that the rapidly expanding air transport network and opening of the airport infrastructure to private sector participation has fuelled the growth of air traffic in India, Singh said, "However, Indian air traffic density is low as compared to other countries."

India is currently the 9th largest aviation market, handling 121 million domestic and 41 million international passengers with more than 85 international airlines operating to India and 5 domestic carriers connecting over 40 countries.

"The domestic civil aviation industry has systematically evolved over the last 100 years of its existence. The sector is poised to handle 336 million domestic and 85 million international passengers by 2020, which will make the country the third largest aviation market. The commercial fleet size is expected to grow from 400 today to 1,000 by then," he said.

He further said that opening up of the sector to foreign carriers by allowing up to 49 per cent foreign direct investment was the biggest game-changer, resulting in two new scheduled airlines, Air Asia and Tata Asia, coming up.

A number of global players have entered Indian aerospace manufacturing, ground handling, training and capacity building, cargo and MRO industry, he added.

"Civil aviation Industry in India is experiencing a new era of expansion driven by factors such as Low Cost Carriers (LCC), modern airports, FDI in domestic airlines, cutting edge information technology interventions, growing emphasis on regional connectivity, increasing involvement of of private participation under PPP and the policy of developing greenfield airports..."civil aviation secretary Ashok Lavasa said during the event.

Lavasa also suggested that the states need to look at the tax structure of jet fuel.

State Governor E S Lakshmi Narasimhan, who was the chief guest, said the civil aviation policy of the Andhra Pradesh Government focuses on the development of non-hub airports across the state by cashing in on the huge infrastructure and communication base built over the years, to make them new magnets of investment for development and to give a fillip to tourism.

The Governor invited the aviation companies to be a part of this development initiative focusing on greenfield airports in tier-II cities.

Advocating `Essential Air Services Fund' as a support mechanism for the sector, Federation of Indian Chambers of Commerce (FICCI) president Siddhartha Birla said there is a need to rationalise the tax structure to boost the sector.

During the show, SpiceJet signed a memorandum of understanding with the US aircraft maker Boeing for purchase of forty-two 737 MAX jets worth a total of Rs 26,000 crore.

The five-day expo is expected to be attended by more than 250 exhibitors, including Airbus, Boeing, Bombardier, Dassault and Rolls Royce. The French ambassador Francois Richier, US trade and development agency director Leocadia Zak and central and state government officials are also expected.