Govt shouldnt stop new airlines entry, says CAPA

Mumbai, Sept 29 | Updated: Sep 30 2006, 05:30am hrs
The Centre for Asia Pacific Aviation on Friday said the entry of new airlines should not be stopped as this was not the time for fine tuning of policy for the sector. It said the industry needed to make its own market mistakes in order to flourish.

The statement from one of the leading body in aviation consultancy in the Asia Pacific region comes only a day after the civil aviation minister said issue of new licenses in the industry would have to undergo high scrutiny.

There is a buzz that certain restrictions will be placed on the entry of new airlines in the country. I strongly believe that preventing new entries would be a recipe for disaster, executive chairman of CAPA Peter Harbison said.

Most of the airlines have been registering heavy losses due to excess capacity addition and rise in the aviation turbine fuel prices. To prevent a situation similar to the mid-1990s when many private airlines closed down as they could not sustain operations, civil aviation minister Praful Patel had said new and pending applications would undergo high scrutiny. He, however, said that there would not be complete restriction on entries of new airlines.

Harbison said the potential of the sector had been far from achieved. He added that for the development of the sector, India should have a transparent competitive authority, progressive removal of access and ownership restrictions, accelerated capital investment for infrastructure and removal of tax red tape.