The Hindu Business Line : Opinion split on allowing foreign airlines in domestic circuit

THE various stakeholders in the domestic aviation industry appear to be split on the issue of allowing foreign airlines to invest in India and on the need to increase the minimum paid-up capital required for setting up an airline in the country.

While a section of the stakeholders attending an `open-house' meeting chaired by the Secretary, Civil Aviation, Mr Ajay Prasad, felt that foreign airlines should not be allowed into the domestic sector and called for increasing the financial entry barrier for those wanting to start afresh, there was another section opposing such a protectionist step.

At present, foreign airlines are not allowed to invest in the domestic aviation sector and the minimum paid-up capital for starting a scheduled domestic airline has been pegged at Rs 30 crore.

During the discussions in the open house, while the established players in the domestic aviation sector are believed to have sought a hike in the minimum paid-up capital of airline companies, citing possible sickness in the sector, some of the new players opposed such a move.

However, the need for having an independent regulator for the aviation industry was endorsed by almost all those present at the meeting.

The Civil Aviation Secretary, when contacted, said: "A broad consensus on the Naresh Chandra Committee recommendations emerged at the open house today. All the stakeholders emphasised on issues connected with airports. Besides, the need for opening and connecting more cities and international airports was also discussed, as was the need for making attempts at reducing the cost of air travel."

"These inputs," Mr Prasad said, "will be useful for the Government in forming the civil aviation policy which should be finalised by January next year."

Officials indicated that work on framing the policy has already begun, with an informal group in the Ministry of Civil Aviation working on drawing up the document.

The `open-house' was attended by representatives of the three apex chambers - the Confederation of Indian Industry, the Federation of Indian Chambers of Commerce and Industry and the Associated Chambers of Commerce and Industry of India - senior representatives of Jet Airways, Indian Airlines, Air Sahara and Air Deccan, tour operators and helicopters operators, among others.