• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Ashwini Phadnis

New Delhi , Dec. 8

THE excitement and joy about the Naresh Chandra Committee report is also leading to some trepidation among the domestic industry players.

Industry sources told Business Line that while the decision to abolish Inland Air Travel Tax and replacing it with a cess, as also the decision to allow public sector employees to fly with private airlines was music to their ears, there were also some fears expressed on the decision to allow an international airline to pick up a 49 per cent stake in a domestic airline.

"While the implementation of the committee recommendations will lead to a lowering of air fares and the number of people flying increasing, the decision to allow an international airline to pick up a 49 per cent stake in a domestic airline could be detrimental to the interest of domestic aviation," industry leaders said.

Industry leaders also point to the fact that nowhere in the world is an international airline allowed to pick up a stake in a domestic airline. "If foreign airlines are allowed to bring in 49 per cent FDI into a domestic airline, they will run the management of the airline. How can we allow such a thing?" an industry watcher asked.

Besides, the decision of the committee to lower financial entry barrier for new players into the sector is also causing concern among a section of the industry. "This is a high-cost industry which has a long gestation period. If the entry levels are lowered, it could lead to sickness, the kinds which was witnessed a few years back," industry analysts predicted.

However, officials of the various leading airline refused to be drawn into commenting on the Naresh Chandra Committee report. "We will only be able to comment on the recommendations after we have studied them in full," a spokesperson of Jet Airways said.

Similarly, the Chief Executive Office of Air Sahara, Mr Uttam Kumar Bose, merely said that the implementation the committee's report could bring about a "revolution in the domestic aviation industry."

Article E-Mail :: Comment :: Syndication

Stories in this Section
Ministry nod for pharma export promotion council

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line