Speaking at the 7th Routes Asia 2009 seminar here on Monday, Nambiar said, In India, for the past five years, we have seen an unprecedented growth in the civil aviation industry of the order of 20% to 25% per annum.
However, over the last few months, we have also seen the deceleration along with the economic downturn. But fortunately, the current recession has not impacted the rural economy badly and there is still a lot of purchasing power in these areas. Airlines should certainly see a key business opportunity in this and start realigning their routes to ensure that they offer connectivity to even tier II towns and smaller cities.
The growth in the aviation sector happened when the private companies were invited into the sector. To encourage foreign investments, 100% FDI, through automatic route, was also allowed in new projects. On its part, the government took up extensive modernisation, upgradation and development of the airport infrastructure sector.
Today, the country has major airportsDelhi, Mumbai, Bangalore and Hyderabad in private hands. Further, out of the 89 operational airports, which are in public sector, almost 60 airports have been taken up for extensive development work. Infact, during 2004-2009, the government has spent almost Rs 20,000 crore in airport sector as against Rs 2,050 crore spent during the period 1999-2004.
This has definitely pushed up the passenger handling capacity at the airports from 71.4 million passengers per annum in 2003-04 to 101.2 million passengers per annum today. We expect that this capacity will further increase to about 200 million passengers per annum once the ongoing projects, including the modernization project of Delhi airport, are completed in 2010, he said.
Apart from giving thrust to airport infrastructure, the government has also laid lot of emphasis on improving the communication, navigation and surveillance facilities. India is among the very few countries in the world to have developed an indigenous Satellite Based Augmentation System (SBAS) for improved navigation. This SBAS system at Gagan is likely to be available for commercial operations in the next two years, he added. Talking about the airport charges, specially the pre-funding measures approved in respect of Delhi and Mumbai airports, Nambiar said, lot of concerns were raised by airlines regarding these charges as they felt that it would adversely affect the traffic and thereby the bottomlines.
But a 10% increase in aeronautical charges after a gap of eight years cannot be faulted especially when you have to balance the interests of both the airports and airlines with the healthy growth of the aviation sector. As regards the levy of development fee at Delhi and Mumbai, the government took this decision after careful consideration. The idea is to ensure that a temporary drop in aviation is not allowed to delay the modernisation projects, he said.