Slow, Steady Take-off

Despite challenges, there is hope of a turnaround in the Indian domestic aviation market

Yunus Dar

The foundation for aviation and sustainable tourism (FAST) on November 19 organised a seminar, titled ‘Emerging challenges in aviation: Infrastructure, capacity building and seamless travel,’ in New Delhi. The seminar began with Lt Gen. K.M. Seth, former governor of Tripura and Chhattisgarh and also the president, FAST, delivering the welcome address. The chief guest for the seminar Usha Padhee, joint secretary, ministry of civil aviation, addressed the gathering and shared her insights on the current status of civil aviation and briefly listed steps the government is taking to further boost the sector.

Joint Secretary, civil aviation ministry, Usha Padhee sharing the panel with top aviation officials at the seminar on Emerging Challenges in Aviation in New Delhi

“I am privileged to be here at this seminar. Indian aviation in the last few years has been growing in the double digits and we are the third-largest domestic market and will soon become the third-biggest market overall. The number of fleets is going to be increased,” said Padhee. She told the stakeholders gathered at the venue that the current economic slump was temporary and India would soon bounce back. “The airlines may not be showing a profit at the moment but they are growing and the net worth has been increasing. We have lot many airports coming and the passenger numbers are growing. We are heading towards a USD 5 trillion-economy and that will certainly boost the aviation sector,” she added.

The seminar was successful in engaging various stakeholders, who actively interact with the government and track the industry, in a constructive dialogue. The experts did not shy away from taking on tough topics such as the economic slowdown and the downfall of big players in the domestic market. Almost every speaker touched upon the topic of India having the potential to become one of the biggest markets and how it is capable of overtaking the likes of France and the UK, provided certain areas are ironed out. Taxing, regularisation and improving ease of business were just a few areas the speakers focused on.

The finest industry experts with nuanced knowledge about the industry were roped in to share their views on their area of expertise. The experts panel included A.G. Joshi, executive director (Arch), AAI, Jodhbir Singh, head of Asia Aviation Associates, KPMG, Dinesh Kumar, MD Asia Aviation, Tara Naidu, chief of commercial, Air India Express, Amber Dubey, joint secretary, ministry of civil aviation, Pulak Sen, founder, MRO Association of India and head of Aerospace and Defence, V. Somasundaram, former member (ANS) — AAI and Group Captain R.K. Bali, MD Business Airlines Operators Association.


UDAN Scheme

The Modi government sought to transform the aviation sector in India with a number of initiatives, UDAN (Ude Desh Ka Aam Nagrik) being one of them. The scheme, announced in October 2016, is one of the flagship schemes of the Modi government that offers subsidised flights at Rs 2,500 per hour of flight. The total subsidy outlay under the first phase of the scheme was Rs 214 crore per annum, which increased to Rs 500 crore annually under the second phase. UDAN aims to boost economic growth by refurbishing old and inoperable airstrips and building newer airports, besides incentivising airlines to offer discounted fares to connect them with bigger cities. The scheme was instrumental in bringing the common man closer to his dream of air travel.

The first three phases of UDAN have had some success with connectivity improving significantly in select inaccessible areas. The government is set to launch the fourth phase of UDAN in a few months, which will include more air routes to states which had previously not been included. The government aims to have about a thousand well-served regional connectivity routes under the scheme. In the fourth phase, the government is aiming to prioritise states like Jammu and Kashmir, Himachal Pradesh, Uttarakhand, Northeastern states and Andaman and Nicobar and Lakshadweep islands. The centre is reportedly contemplating opening two airports in the newly formed Union Territory of Ladakh, in the districts of Kishtwar and Kargil. Besides, two more cities, Bilaspur and Ambikapur in Chhattisgarh, are expected to be connected in the fourth phase of UDAN.

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