61% growth in domestic traffic on private airlines

New Delhi, Feb 25 | Updated: Feb 26 2005, 05:30am hrs
In the wake of recent policy initiatives in the civil aviation sector, private airlines like Jet Airways, Air Sahara, and Air Deccan, now account for 61.1% of domestic traffic. According to the Economic Survey, domestic traffic grew by 24.7% in 2004 over the previous year. The international traffic too saw a growth of 18% in the same period, it said.

The Survey, which expressed concern over little progress made in the civil aviation sector especially on airport modernisation, asked the states to play bigger role in this endeavour. It said efforts to restructure and modernise the Mumbai and Delhi airports through the joint venture are already underway and an empowered group of ministers has been constituted to oversee the restructuring exercise. A Request for Proposal (RFP) document is expected to be released shortly to pre-qualified bidders for selection of the joint venture partner, it said.

The Survey said two new greenfield airports with private sector participation are proposed at Bangalore and Hyderabad. In these greenfield airports, private partners will hold 74% equity stake and state governments and Airports Authority of India (AAI) will together hold the balance 26%. The Bangalore and Hyderabad International Airports and AAI have signed the respective shareholders agreements.

AAI has also appointed Indian Financial Consultants (IFC) and Global Technical Advisors as consultants for development of non-metro airports. The Survey said 10 airports have been identified, namely Ahmedabad, Amritsar, Goa, Guwahati, Lucknow, Madurai, Jaipur, Mangalore, Trivandrum and Udaipur, for infrastructure upgradation. Besides these 10 airports, AAI proposes to carry out similar studies for 15 more airports, it said.

Flying High
Domestic passenger traffic grew by 24.7% in 2004
International traffic saw a growth of 18%
Rejig process of Mumbai, Delhi airports underway
Airport economic regulator on anvil
The Survey pointed out that improvements in the degree of competition have helped deliver lower prices and a sharp increase in both domestic and international traffic. During the year, Jet Airways and Air Sahara started operating flights to Sri Lanka and Nepal. The government has also decided to allow private airlines (Air Sahara and Jet Airways) to operate to any destination in the world, except Gulf countries.

The Survey highlighted that in order to ensure sufficient availability of seats, a limited open sky policy was adopted by the government for November 2004 to March 2005 time period, under which designated airlines can operate additional services to/from India. A number of foreign airlines have responded to the offer and sought permission for 2,400 additional flights to different airports in the country, the survey said.