Tata SIA calls on Indian government to liberalise aviation
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Tata SIA Airlines, the joint venture behind Delhi-based start-up airline Vistara, has called on the Indian government to ease restrictions on airlines.
A press conference in Delhi this week, Tata SIA’s chairman, Prasad Menon, released a report prepared by the Centre of Asia Pacific Aviation (CAPA) which showed that India could benefit to the tune of US$250 billion per year by 2025, if the government took steps to liberalise the sector.
With an anticipated three-fold increase in domestic air traffic, the CAPA report asserted that the Indian aviation sector has the potential to contribute to more than 5% of the country’s GDP. By 2050, it stated, Indian aviation could generate direct employment for more than 2.3 million people.
“The purpose of this report is to provide a comprehensive and structured understanding of the aviation sector and to highlight the significant areas that have the potential to transform India’s aviation sector,” said Menon. “This report will provide valuable insights for greater partnership between government and businesses.”
The report makes a series of “strong recommendations” that could impact the future of Indian aviation. These include reducing costs for airlines, including taxation on jet fuel and airport fees, and lowering bureaucratic barriers to entry for new airlines. The report also states that “commercial matters (such as pricing and ancillary services) should be left to the airlines”.
One key recommendation was for the Indian government to abolish the so-called “5/20” rule, which requires airlines to operate domestic routes for five years and have a fleet of 20 aircraft before they can launch international flights. This rule, according to CAPA, is “discriminatory to Indian airlines, as foreign carriers that do not meet these criteria are allowed to operate in Indian skies, but Indian airlines cannot enjoy reciprocal rights.”
The report also urged the government to invest in airport infrastructure, airspace management and HR development, and to set up an “airports approval commission” to judge the locations and size of new facilities. Finally, the report called for a renewed focus on safety.
“India is blessed with undeniably strong fundamentals to become a global leader in aviation. The aviation sector is at a critical juncture when it needs government and businesses to form a strong partnership and create a collaborative environment to truly transform the industry and establish India as a global aviation hub,” the report concluded.
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