Airline companies see in the recent circumstances rising out of a stronger rupee and a revival in air travel, an opportunity to aggressively push for new measures and bring themselves out of the red. The national aviation committee, recently constituted by the Confederation of Indian Industry (CII), will recommend a series of revival measures to the government, including rationalisation of taxes on aviation turbine fuel (ATF) and an end to monopoly in ground handling policy at various airports.
Airlines can look forward to a patient hearing of their demands. Alok Sinha, joint secretary in the civil aviation ministry, told
FE, ?Any recommendations that can foster growth in the sector are most welcome by the ministry.?
Chaired by M Thiagarajan, managing director, Paramount Airways, CII?s aviation panel is actively considering factors which can help airlines stay afloat at a time when they are collectively projected to post losses of Rs 10,000 crore for the current fiscal. Also, various recommendations that are currently being reviewed by the committee will be presented to the civil aviation ministry and the finance ministry before the Union Budget is presented in February 2010.
A reduction in the costs incurred in repair and maintenance and high prevailing taxes on aviation turbine fuel (ATF) are vital to airlines. Speaking exclusively to FE, Thiagarajan said, ?International aircraft manufacturers, with the help of easier government rules, should put up repair and maintenance facilities in India so that airlines based out of India need not send their aircraft abroad for repair and maintenance works.? Moreover, ATF constitutes nearly 35-40% of the operating cost for airlines, which pay nearly 70% higher than their international counterparts due to arbitrary tax structures prevalent in the country. Airline operators pay 25%?35% taxes on ATF in different part of the country. The committee wants a uniform tax structure of 4% on ATF pan India.
Thiagarajan further said there should be a national civil aviation policy in the country which will enable the sector to prosper. According to civil aviation ministry sources, in 2007, a proposal for formulating a civil aviation policy has been sent to the Cabinet for consideration. However, though the country does not have a comprehensive policy document for the sector, there have been various initiatives from the government like adopting a liberal approach by granting traffic rights to international carriers, and developing metro city airports on the public private partnership (PPP) model.
The CII?s committee is also brainstorming suggestion whereby 35 non-metro airports can be developed through the PPP route similar to that of airports in metro cities. The committee is also preparing an exhaustive document by which if a developer wants to develop greenfield airports, he would get technical approvals through a one stop window basis. On November 23, the government has given ?in principle? approval for the establishment of 12 greenfield airports for public use in various parts of the country.
Further, CII is also interacting with the Airports Economic Regulatory Authority (AERA) to ensure that the regulatory body plays a leading role in developing airport infrastructure in the country.