The Hindu Business Line : Paving the way for global take-off of aviation sector

THE civil aviation centenary year has been a fortuitous one for the domestic sector. The year saw the Government take a number of preliminary steps to make air travel a comfortable affair as also modernise the entire infrastructure, the high point being the recommendations of the high-powered Naresh Chandra Committee.

During the fag end of the year, both India and Pakistan agreed to allow airlines registered in the other country to use their respective airspace from January 1 next year. The move will not only help Air India (AI) cut down flying time by anything between 15 minutes and one hour, but also reduce the Maharaja's fuel bill by about Rs 35-40 crore annually. Air passengers as also Indian Airlines will stand to benefit from implementation of the decision.

The real benefit to the civil aviation sector, including the passengers, however, could come from the implementation of the Naresh Chandra Committee report. For instance, the committee has recommended that the private sector airline be allowed to operate on international routes, some thing which the private players have been pleading for some time now.

Incidentally, within days of the committee report being submitted to the Government, the Union Cabinet approved a proposal to allow scheduled private sector airlines to start operations to the six member states of the South Asian Association of Regional Cooperation (SAARC). In effect, the Government decision means that soon, passengers will have the option of flying with Air Deccan, Air Sahara or Jet Airways next time they travel to Sri Lanka, Bangladesh, Nepal, the Maldives, Pakistan and Bhutan.

The committee has also asked the Government to consider allowing foreign airline to pick up a 49 per cent stake in domestic airlines.

Besides, in a bid to expedite the process of privatisation of Air India (AI) and Indian Airlines (IA) and facilitate transfer of the management to strategic private investors, the committee has recommended that the Government may consider private placement of shares of the two airlines with domestic financial institutions (DFIs) and foreign institutional investors (FIIs). In addition, the report also urged the Government to examine various options to cut the high cost of domestic air travel.

The Government, on its own, has also initiated steps to make air travel to and from India easier for the customer. As in the past, during the year, the Government followed a limited time `open sky' policy, which extended from December this year to February 2004. But in a major departure from the previous year's announcement, the Government allowed all airlines, including those from the Gulf countries, to operate under the open sky policy.

The Minister of Civil Aviation, Mr Rajiv Pratap Rudy, told Parliament that during the three-month period that the open sky policy is to remain in force, close to 1.2 lakh additional air seats would be available to the passengers.

Besides, in October this year, the Prime Minister allowed the designated airlines of the 10-member Association of South East Asian Nations (ASEAN) to operate daily flights to the four metro cities, apart from operating flights to 10 other tourist destinations in India. Air India (AI) and Indian Airlines (IA) will also be given the right to fly to the ASEAN region as and when airlines from those nations start operating flights to India.

The year was also fruitful for the State-owned airlines AI and IA. After waiting for years, the Maharaja's 28-aircraft fleet acquisition plan was cleared by the AI board. Besides, the long-awaited IA fleet acquisition plan for acquiring 43 Airbus aircraft cleared the first hurdle with the pre-Public Investment Board (pre-PIB) meeting giving its nod for the project.

The year also saw AI get a Chairman and Managing Director, Mr V. Thulasidas, after a gap of close to a decade. There was also a change of guard at the headquarters of the Ministry of Civil Aviation, with Mr Rudy replacing Mr Shahnawaz Hussain in May this year.

The country's first no-frill airline - Air Deccan — also took to the sky during the calendar year. But the financial misfortunes of most of the airlines continued with almost all the major domestic players including IA, Jet Airways and Air Sahara reporting losses.

Some initial efforts were also made to make air travel more comfortable. The Airports Authority of India (AAI) initiated work at 24 airports focusing on 11 areas, including interiors, signage and lighting, among others, to make air travel more comfortable. The Government also initiated the first tentative steps towards the creation of world-class airports at Delhi and Mumbai.

However, the government's attempts to appoint a financial consultant to assist in restructuring of the two airports has run into rough weather at present.

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