“Open Skies” Opening of Indian Aviation Infrastructure Sector: A Myth or a Reality

The Indian civil aviation sector is witnessing a passenger growth of
twenty percent annually for the past four years. It is expected that
this rate will increase to 45 percent this year and continue till
2010 and more. There has been dramatic increase in number of aircraft from 212 in 2002 to 345 in 2007 and this number will go up to 450 by
2010. According to Minister of civil aviation, Mr. Praful Patel,
presently only 0.8 percent of Indian population travel by air, once
this figure goes up to 10 percent, 5000 aircrafts would be required.
According to market research firm PhoCus domestic air traffic would
grow to 86.1 million passengers by 2010, up from 32.2 million
passengers in 2007.

How has this been achieved?
The credit for this must go to deregulation of air services in 1990 under
which private carriers were allowed to operate in Indian sky as airtaxi
operators. Subsequently in 1994, full-fledged operations were allowed under
which many airlines like Jet Airways, Sahara (now Jet Lite), Deccan Airlines
(now King Fisher Airlines) etc are now successfully competing with the India’s
national carrier Indian (now merged with Air India). The international sector
has also been opened to carriers having minimum of 12 aircrafts and 5 years
experience of operating in the India. There is considered view amongst the
business community that infrastructure constraints are hampering the faster
growth in aviation sector. A second revolution appears to be necessary and
urgent requirement. A liberal fresh approach in attracting capital in
aviation infrastructure sector is required.

There are 200 small towns across the country having a
huge potential of passenger growth. However 130 of these do not have
airport infrastructure. No doubt Airport Authorities of India (AAI)
has drawn a master plan to upgrade 70 airports but the completion date
is 2012, which in all likelihood would be further delayed. AAI has entered
into an MoU with two foreign companies to set up Greenfield airports
at Hyderabad and Bangalore. The MOU stipulates that the existing
airports at these places will close down and all aircrafts will use
the new airport. For smaller airport similar understanding,
incentives and concessions are required to attract private investors.
Captain G R Gopinath of Deccan Airlines fame has shown key interest
in developing low-cost airports across the country and had formed a
consortium for bidding for upcoming projects. However lower cost of
operations are possible only when escorting services at these airport
such as communication, Air-Met, landing and other support services
are cost effective and competitive while meeting International Civil
Aviation Organisation (ICAO) safety norms, like what are available
across low-cost airports across the world.

What is now required is to remove all government
restrictions (in the form of AAI monopolized investment norms) from
the aviation services sector and allow unrestricted entry of private
players similar to what was done in telecom sector. All the infrastructure
and services should be opened to competition at one go. An airport regulator
could then oversee the activities of all the stakeholders in aviation
sector through transparent rules.

Air navigation services, which include communication,
metrological Aviation, air traffic control still continues to be in single
monopoly control of AAI. The standard of these services being
provided by Indian Metrological Department (IMD) & Directorate
General of Civil Aviation (DGCA) are strained even at international
airport like Mumbai & Delhi due to increase in traffic. These
services availability at smaller airports are virtually non-existent.
As stated earlier, these services are also required to be brought
under competition to ensure their modernization as well availability
in time at the upgraded and under development airports. Similar steps
have been taken in other countries notably, China, New Zealand,
France, USA and many Middle East countries. AAI could take over the
role akin to Telecom Regulatory Authority of India (TRAI) and work as
a regulator for ensuring quality services on Indian Airports.

It is understood that an inter-ministerial group on Civil
Aviation of Government of India is evolving a new aviation policy. It is to be
hoped that the new policy looks into issues of quality services also
for a total open sky policy leading way for a rapid growth of
aviation infrastructure in India.

For more information, please contact

Surendra Kumar Singh

Director

Institutional Cooperation, Public Relations & Media

Climate & Weather Information Systems Unit (CWISU)

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