The civil aviation industry has strongly urged the government to facilitate easier norms in its soon to be unveiled new civil aviation policy. At a seminar organised by CII in Delhi recently, the leading domestic and global representatives strongly pitched for progressive and flexible policy approach which will be critical for taking Indian aviation market in the global top league in the next one decade.
“Cost of doing business is already weighing down (carriers) even before they start competing,” Vistara CEO Phee Teik Yeoh commented while emphasising that Indian aviation sector is over-regulated. Also present on the occasion was IATA chief Tony Tyler who strongly suggested that the country should adopt a smarter regulation policy to pave the way for its aviation growth story to unfold as per its potential. According to IATA, India is slated to become the third largest aviation market in the world by 2029. Tyler specifically made three recommendations – doing away with tax burden, making India’s fuel price regime competitive and allowing the Airports Economic Regulatory Authority (AERA) to function independently. “ The true value of aviation to the government’s coffers is its ability to catalyse economic activity. Focusing on receipts through a layered web of taxes does a disservice to the country’s economic potential,” Tyler said while pointing out at the existing taxation oddities.
Tyler was also critical in his comment on the proposition of adhering to either 5/20 rules or DFC (Domestic Flying Credit) formula which government is contemplating to allow more Indian carriers to fly abroad. “Another example of a uniquely Indian approach is the 5/20 rule. This was established with the understandable aim of ensuring that international flights would only be operated by safe and financially robust carriers. But there are other ways of achieving this.” Vistara CEO too did not mince any words while underlining that 5/20 rule is not the right prescription for the airlines which intend to grow fast by going beyond Indian boundaries.
Earlier, while delivering his inaugural address, Civil Aviation Minister Ashok Gajapathi Raju assured the industry that the new aviation policy will be attuned to the new market dynamics. “ When it comes to objective, the government is on the same page as the industry. The issue is how to do it which we are weighing right now,” he said.
By Ritwik Sinha
