Aviation sector to see strong growth; air traffic to rise 14%: Report
Domestic aviation industry is likely to see a strong growth period with air traffic estimated to grow at 14 per cent helped by a positive outlook for crude prices, says a report. However, the report by ICICI Securities noticed that the growth rate of 14 per cent is low considering that the average annual growth rate of passenger-traffic in India has been more than 18-20 per cent since 2000. “India’s aviation sector is set to undergo a strong growth period, which should benefit all incumbent players, particularly on a benign crude price outlook,” the report said. “Our supply-demand model for domestic air traffic implies 14 per cent growth in passengers as evidenced from firm aircraft orders and latest delivery schedules,” it said. Further, the report noted that air fare corrections on account of lower crude prices have already played out with up to 15 per cent dip in fares in 2015-16. “As such, we believe that the fares are likely to stabilise with increasing oil outlook,” the report said. “In the near term, there is still sufficient room left among the metro cities of (about 45 million excess capacity remain) within the top airports which share 90 per cent of the cumulative traffic among themselves,” it said. The report noted that barring three events, the average annual growth rate of passenger-traffic in India has been more than 18-20 per cent since 2000. These events were in 2001-02 in the wake of terrorist attacks in the US (9/11) and the subsequent global crisis, the great 2009 financial recession, and in 2012 when Kingfisher Airlines went bankrupt. With an exception of IndiGo which has a strong balance sheet, the report noted “that the other airlines have missed the plot thus far is a given, but the current growth phase of domestic aviation and low crude price outlook provide opportunity for them to shore up their balance sheet”. Marty Mcsorley Womens Jersey
Ministers in former UPA government say aviation policy lacks implementation plan
The ministers in the former United Progressive Alliance (UPA) government criticised the first-ever policy on aviation, saying it lacks crucial requirements and falls short of an implementation plan, a day after the National Democratic Alliance (NDA) government announced the policy. The two significant announcements in the policy are — replacement of five years and 20 aircraft international flying norms with 0/20 or 20%, whichever is higher, and introduction of regional flights at a fixed fare of Rs 2,500/hour. ET spoke to former aviation ministers Praful Patel and Ajit Singh, trying to pick their brains on the new initiatives. While Patel said that the policy lacks vision on the execution of key announcements, Singh termed it a missed opportunity. “While the concept of regional flights at Rs 2,500 per hour is good as newer cities will be connected, there will be many challenges of execution, which the government has not factored in, it seems,” Patel said. He, however, praised the decision to replace the 5/20 norm with a new lenient one, saying it is a welcome step. “Times were different when 5/20 was introduced and the change is in continuity with the change, as the sector has grown exponentially,” he explained. Notably, Patel was the aviation minister when the 5/20 formula was introduced in 2004, and the 0/20 norm to replace 5/20 is believed said to have been suggested by Patel himself in one of the consultative committee meetings, which discussed the aviation policy. Singh said the policy has not touched upon important issues such as the formation of Civil Aviation Authority (CAA) to replace the Directorate General of Civil Aviation (DGCA). “Formation of CAA was recommended by all committees formed in the country to suggest measures to improve the aviation sector. Not just that even International Civil Aviation Organisation (ICAO) had recommended it. During my tenure, it was even cleared by the parliamentary standing committee. The policy does not say anything on it,” Singh said. Blidi Wreh-Wilson Jersey
GMR Infra not to sell controlling stake in Hyderabad Airport
GMR Infrastructure today denied selling controlling stake in Hyderabad Airport but added that it is exploring opportunities to raise funds. “We completely deny sale of controlling stake in Hyderabad Airport. We wish to submit that GMR Group has been continuously exploring opportunities to raise necessary funds for the group,” GMR Infrastructure said in a clarification to the BSE. The company was reacting to speculations about the company being in advanced negotiations regarding sale of controlling stake in Hyderabad Airport. For the quarter ended March 31, 2016, the company reported a consolidated net loss of Rs 953.5 crore as against a net loss of Rs 891.9 crore in the year-ago period. Its total income from operations rose 29.12 per cent to Rs 3,708.37 crore during the quarter from Rs 2,872.01 crore in the year-ago period. Yovani Gallardo Authentic Jersey
New Indian aviation policy may give wings to Air Kerala project
The Indian government’s green signal for a new civil aviation policy has once again rekindled hopes for the much-awaited Air Kerala to take off. The Central Government on Wednesday scrapped the 5/20 clause which required an airline to have at least five years of domestic flight service experience for starting an overseas service. However, the condition that the airline must have at least 20 aircraft to launch an international service has been retained. Easing the rule would mark an important step towards liberalising India’s aviation market, the world’s fastest growing. The change is expected to increase regional connectivity, boost cargo operations and make flying cheaper. V. J. Kurian, additional chief secretary to the government of Kerala and managing director of Cochin International Airport Limited (CIAL), said now that the deck has been cleared for the airline, it’s up to the new Left Democratic Front government to take a final decision. He said a CIAL board meeting at the end of the month will take stock of the situation. Talking to Khaleej Times, Kurian said the cabinet decision is a welcome change. “Starting an airline is not an easy business. There is risk involved in it. But once a policy decision is taken, we will look at the viability of the whole thing, not forgetting so many carriers are running services from here.” “The world over, airlines have never been a great business, except for some like Lufthansa, Emirates, AirAsia etc. Most of them are not making big money. But a policy decision has to be taken based on the social aspect as well. Air Kerala will be a boon to millions of people, especially the low-income group, working in the Middle East,” he said. Dennis Smith Authentic Jersey
Jaipur Int’l Airport to have direct flights to Japan, Singapore soon
People of Rajasthan will be saved from travelling all the way to Delhi for boarding International flights as a number of flight operators are starting operations from Jaipur International Airport (JIA) from October. JIA, named as one of the best airports in Asia Pacific Region, would soon have direct flights to Japan, Singapore and other countries as its runway has been upgraded to Category-E. In April, Airport Council International (ACI) had awarded first rank to JIA for catering to two to five Million Passengers Per Annum (MPPA). The up-gradation of the runway from 2709 to 3410 metres, built at a cost of Rs189 crore, has been readied and it would accommodate planes with a capacity of 350 passengers from October this year. Besides the runway, 150 metre strips on either side were cleared from dried grass and central inset lights have also been installed on the runway for planes to land or take off easily during foggy weather. DaeSean Hamilton Authentic Jersey
New aviation policy: Now, just fly, forget Indian Railways
Consumers hailing from smaller towns and cities hitherto unconnected by flight have something to look forward to as they may soon get to fly more often and at affordable rates. The civil aviation policy has unveiled a regional connectivity scheme (RCS) that aims to connect smaller towns and cities to the main hubs and has capped the fare at Rs 2,500 per passenger for one-hour flights on the RCS routes that include unserved airports. To implement this policy, the government plans to revive 160 airports and airstrips each at a cost of Rs 50-100 crore. What this means is that while there would not be any change in fare for a Delhi-Chandigarh flight, for a destination not connected by air from Delhi today that gets connected tomorrow and can be reached in an hour, the fare would be capped at Rs 2,500 per passenger. To bridge the gap between actual cost and the capped fare, the government will provide viability gap funding (VGF) to airlines plying on the RCS routes. The VGF will be shared between the ministry of civil aviation and state governments. The burden will be shared on an 80:20 basis for RCS airports while for the northeastern states the ratio will be 90:10. The VGF will be funded by a small levy per departure on all domestic routes, other than Category II and IIA routes, RCS routes and small aircraft, at a rate decided by the ministry from time to time. “We plan to impose a small levy per departure on all domestic flights other than CAT II /CAT IIA routes,” said Rajeev Nayan Choubey, civil aviation secretary. However, he added that this will be so small as to have any impact on the fares of flights plying on these routes. In the draft, the aviation ministry had proposed a cess of 2% on most of the domestic and international routes to raise funds to improve regional air connectivity, which it has dropped. “We have right now only come out with the broad contours of the RCS, we will be coming out with the detailed scheme within 10 days,” said Ashok Gajapathi Raju, Union minister for civil aviation. Tyler Ervin Authentic Jersey
New aviation policy to usher in no frills airports
The cabinet on Wednesday approved the civil aviation policy that allows development of greenfield airports within 150 km radius of an existing Airport Authority of India (AAI) airport. However, the policy provides for ‘suitable compensation’ to the state-run airport operator if its airport is not fully saturated. “Airport Authority of India (AAI) will continue to develop and modernise its airports and upgrade quality of services. AAI will be suitably compensated in case a new greenfield airport is approved in future within 150 km radius of an existing operational AAI airport which is not yet saturated,” the government said in a statement. Out of 125 airports belonging to AAI, about 95 are operational and 71 had scheduled operations as of July 2015. The policy paves the way for AAI to take up no-frills airports, which will be done at a cost not exceeding Rs 50 crore. For such airports, the requirement for 12% internal rate of return (IRR) on the project will be relaxed for revival of these airports. Additionally, If such airports fall under the regional connectivity scheme, it will be made operational only in those states that reduce value added tax (VAT) on aviation fuel to 1% or less. Lawson Crouse Jersey
India will be 3rd largest market by 2022, says Gajapathi Raju
Civil Aviation Minister Ashok Gajapathi Raju on Wednesday said the nation would soon emerge as the third largest civil aviation market by 2022. Raju took to Twitter minutes after the Union Cabinet cleared the national civil aviation policy that has, in a way, seen major reforms in the aviation sector. “India will be the 3rd largest civil aviation market by 2022. To achieve this, we need right intentions, vision, planning and execution,” Raju tweeted, and followed it with another, praising the NDA government. “NDA govt clears India’s first ever integrated National Civil Aviation Policy. This will be a game-changer for the sector,” he said. The National Civil Aviation Policy introduces a slew of passenger-friendly measures including capping of airfares at Rs 2,500 for an hour-long flight. The Civil Aviation Ministry had sent the civil aviation policy to Cabinet for approval on June 3. L.C. Greenwood Authentic Jersey
Aviation policy a game changer: Ashok Gajapathi Raju
The much-awaited national civil aviation policy that seeks to strengthen regional connectivity and tap the sector’s high growth potential was on Tuesday cleared by the Union Cabinet. Civil aviation minister Ashok Gajapathi Raju said the policy is a “game changer” and that the country’s aviation sector is poised to become the world’s third largest by 2022. The policy has been finalised after nearly eight months since the ministry came out with the revised draft in October 2015 and follows many rounds of deliberations with stakeholders. The NDA government had for the first time unveiled the policy draft in November 2014. “NDA government clears India’s first ever integrated National Civil Aviation Policy. This will be a game-changer for the sector,” Raju said in a tweet. In another tweet, the minister said India would be the third largest civil aviation market by 2022. “To achieve this, we need right intentions, vision, planning and execution,” he added. Significantly, India’s domestic air traffic market logged the fastest growth in the world for the 13th consecutive month in April. The market grew at nearly 22 per cent during the month. “India’s domestic traffic soared 21.8 per cent, marking the 20th month of double-digit traffic growth and the 13th consecutive month it has led the domestic markets,” global airlines body, International Air Transport Association (IATA) had said last month. Roger Clemens Authentic Jersey
National Civil Aviation Policy, 2016 : Salient Features
The Minister of Civil Aviation Shri P. Ashok Gajapathi Raju released the National Civil Aviation Policy 2016 in New Delhi today. This is the first time since independence that an integrated Civil Aviation Policy has been brought out by the Ministry. Speaking on the occasion Shri Raju said that the centre-piece of the policy is to make regional air connectivity a reality. He said that the policy aims to take flying to the masses by making it affordable and convenient, establish an integrated eco-system which will lead to significant growth of the civil aviation sector to promote tourism, employment and balanced regional growth, enhance regional connectivity through fiscal support and infrastructure development and enhance ease of doing business through deregulation, simplified procedures and e-governance. The policy is very comprehensive, covering 22 areas of the Civil Aviation sector. Its salient features are as follows : Regional Connectivity Scheme · This scheme will come into effect in the second quarter of 2016-17 · Airfare of about Rs2500 per passenger for a one-hour flight · This will be implemented by way of: · Revival of airstrips/airports as No-Frills Airports at an indicative cost of Rs.50 crore to Rs100 crore · Demand driven selection of Airports/airstrips for revival in consultation with State Govts and airlines · ViabilityGapFunding(VGF)toairlineoperators · RCS only in those states which reduce VAT on ATF to 1% or less, provide other support services and 20% of VGF · Concessions by Stakeholders · There will be no airport charges · Reduced Service tax on tickets (on 10% of the taxable value) for 1 year initially · Reduced Excise duty at 2% on ATF picked at RCS airports · State government will provide police and fire services free of cost. Power, water and other utilities at concessional rates · Creation of Regional Connectivity fund for VGF through a small levy per departure on all domestic flights other than Cat II/ Cat IIA routes, RCS routes and small aircraft below 80 seats at a rate as decided bythe Ministry from time to time · VGF to be shared between MoCA and State Governments in the ratio of 80:20. For the North Eastern States, the ratio is 90:10 Route Dispersal Guidelines (RDG) · Category I to be rationalized based on a transparent criteria, i.e., flying distance of more than 700km, average seat factor of 70% and above and annual traffic of 5 lakh passengers · The percentage of Cat.I traffic to be deployed on Cat.II, and IIA will remain the same while for CATIII it will be 35%. Routes to Uttarakhand and Himachal Pradesh included in Category II · Revised categorization to apply from winter schedule of 2017 · There view of routes will be done by MoCA once every5 years · Withdrawal or revision of domestic operations to and within North East Region etc, subject to full compliance of RDG, can be done under prior intimation to MoCA at least three months before withdrawal or revision of the service 5/20 Requirement 5/20 Requirement · Replaced with a scheme which provides a level playing field · All airlines can now commence international operations provided that they deploy 20 aircraft or 20% of total capacity (in term of average number of seats on all departures put together), whichever is higher for domestic operations Bilateral Traffic Rights · GoI will enter into ‘Open Sky’ ASA on a reciprocal basis with SAARC countries and countries located beyond 5000 km from Delhi · For countries within 5000 km radius, where the Indian carriers have not utilised 80% of their capacity entitlements but foreign carriers /countries have utilised their bilateral rights, a method will be recommended by a Committee headed by Cabinet Secretary for the allotment of additional capacity entitlements · Whenever designated carriers of India have utilised 80% their capacity entitlements, the same will be renegotiated in the usual manner. Ground Handling Policy · The Ground Handling Policy/ Instructions/Regulations will be replaced by a new framework: · The airport operator will ensure that there will be three Ground Handling Agencies (GHA) including Air India’s subsidiary/JV at all major airports as defined in AERA Act · At non-major airports, the airport operator to decide on the number of ground handling agencies, based on the traffic output, airside and terminal building capacity · All domestic scheduled airline operators including helicopter operators will be free to carry out self-handling at all airports through their regular employees · Hiring of employees through manpower supplier or contract · workers will not be permitted for security reasons Airport PPP/AAI · Encourage development of airports by AAI, State Governments, the private sector or in PPP mode · Future tariffs at all airports will be calculated on a ‘hybrid till’ basis, unless specified otherwise in concession agreements. 30% of non-aeronautical revenue will be used to cross- subsidise aeronautical charges · Increase non-aeronautical revenue by better utilisation of commercial opportunities of city side land · AAI to be compensated in case a new greenfield airport is approved in future within a 150 km radius of an existing unsaturated operational AAI airport (not applicable to civil enclaves) Aviation Security, Immigration and customs A · sMoCA will develop ‘service delivery modules’ for aviation security, Immigration, Customs, quarantine officers etc in consultations with respective Ministries/Departments · Allow Indian carriers to provide security services to other domestic airlines subject to approval of BCAS · Encourage use of private security agencies at airports for non- core security functions to be decided in consultation with MHA · Such agencies should be registered under the Private Security Agencies (Regulation) Act, 2005 and will also be separately accredited by BCAS · Subject to minimum benchmarks being met, security architecture at the different airports will be proportionate to the threat classification and traffic volume. Helicopters and Charters I · Separate regulations for helicopters will be notified by DGCA after due stakeholder consultation · MoCA to coordinate with Govt agencies and other helicopter operators to facilitate Helicopter Emergency Medical Services · Helicopters will be free to fly