06 Oct 2015

Indian Aviation News:Transformation of Aviation Sector

Posted in Indian Aviation News By arcgup5 On October 6, 2015

Indian Aviation News :TATA SIA Airlines ( Vistara) Limited unveils first comprehensive and structured report on aviation sector recently.

The report looks at opportunities in five categories and has made strong recommendations that could impact the future of Indian aviation:

Rationalisation of taxes on ATF: ATF, which accounts for up to a significant 30-35% of the operating cost of Indian airlines, is 45% more expensive in India than in the United States, due to the combination of import duty, excise and sales taxation. The removal of sales taxation on ATF would bring its price down by around 20% and deliver a 7% drop in operating expenses, potentially boosting traffic by around 8-9%.
Lowering the high cost of airports: The aeronautical charges at India’s airports are amongst the highest in the world and more expensive as compared to major neighbouring hubs in the region such as Singapore and Dubai
Making in-country MROs more competitive: Service tax on labour, VAT on materials, and import duties applied to in-country aircraft maintenance providers should be lifted. This would obviate the current practice of sending empty aircraft to neighbouring hubs for maintenance and spawn an indigenous MRO industry, employing thousands and significantly contributing to the exchequer and to “Make in India”

Single window process and defined timeline in licensing : Currently to set up an airline up to 10 government agencies may have to be approached, which creates significant delays
Simplify RDG: Let market forces prevail – Cat 1 and Cat 3 routes should be combined into one. To promote remote region connectivity India can emulate markets like the US, Canada, Europe and Australia, where airlines are incentivised to provide connectivity by means of direct grants and subsidies which ensure that relevant services are provided to the communities which need them.
Commercial matters should be left to the airlines: Let market forces prevail. Airlines should be allowed and encouraged to innovate for pricing and ancillary service for customers’ benefits
Expedite cargo processing and reduce dwell time: Lack of technology, prevalence of manual procedures and processes, and greater incidence of multiple inspections means that the dwell time of air cargo can be 1.5-2 days for exports and 2-4 days for imports, as against a matter of hours at other global airports, thus increasing costs and spoilage of perishable goods

Indian Aviation News

Abolish 5/20 rule: Apart from the fact that there are no global parallels to this rule, the regulation 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. Indian carriers are best placed to promote India as a tourism destination and should be encouraged to provide international connectivity if they wish to do so.

Establish a clear bilateral policy: Rule based and transparent award and allocation of bilateral rights is critical for airlines to plan and deploy capacity, and for India to enhance trade and investment ties with strategic markets across the globe

Set up Airports Approval Commission: India is heading for a traffic logjam with most of the existing metro airport infrastructure getting saturated in 5 years. The Airports Approval Commission should determine what kind of airports India requires, when and where they are required, how much capacity is necessary and the level of capex that should be invested
Develop supply-side capacity : Investments are also required In airspace management, as also in skill development to support the sector’s growth

Access to expertise and trained, fit-for-purpose resources are critical for the DGCA to maintain India’s international standing as a safe and well regulated jurisdiction

All these things are expected from upcoming aviation policy.

Atom Aviation Services