NEW POL­ICY AWAIT­ING CAB­I­NET NOD

A REN­DEZVOUS WITH UNION MIN­IS­TER OF CIVIL AVI­A­TION P. ASHOK GA­JAP­ATHI RAJU

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Jayant Baran­wal, Edi­tor-in-Chief of SP’s AirBuz (ac­com­pa­nied by Neetu Dhu­lia) had an exclusive ren­dezvous with the Union Min­is­ter of Civil Avi­a­tion, P. Ashok Ga­jap­athi Raju, dur­ing the sec­ond half of Jan­uary this year. The in­ter­ac­tion in­cluded wide rang­ing sub­jects per­tain­ing to In­dia’s civil avi­a­tion sce­nario. Some of them were the growth fac­tor, 5/20 rule, re­gional con­nec­tiv­ity, general and busi­ness avi­a­tion, cargo busi­ness and also the up­com­ing Na­tional Civil Avi­a­tion Pol­icy. Ex­cerpts:

CUR­RENT SCE­NARIO

Jayant Baran­wal (Baran­wal): Could you give a quick per­spec­tive on the growth pace of our civil avi­a­tion in­dus­try? Civil Avi­a­tion Min­is­ter (Min­is­ter): The growth is re­ported to be around 20 per cent over the pre­vi­ous year; ac­tu­ally it’s a good growth. I think it is a re­flec­tion of the econ­omy and it also gains from the econ­omy. Civil avi­a­tion has ben­e­fited in the past one year. Of course, there are many fac­tors and one fac­tor that, I think, which is fairly im­por­tant is the price of ATF (avi­a­tion tur­bine fuel) com­ing down, and that has been a stim­u­lus. Baran­wal: But in that case if ATF goes up, then what do you think? Min­is­ter: I don’t think it will go up now. It does not look as if it will go up. Baran­wal: But there could be a pos­si­bil­ity that it will even­tu­ally go up? Min­is­ter: You see, once you are born, death is even­tual, but ev­ery day you don’t re­ally think about it. The trends don’t show as if it will go up that way in the fore­see­able fu­ture. You could say prob­a­bly in this year, for in­stance, def­i­nitely, the trends don’t look in that di­rec­tion. I am no ex­pert there, so gen­er­ally, I think there will be growth in pas­sen­ger traf­fic.

Cargo is lit­er­ally minis­cule in our coun­try and so it has scope not only for ex­ports but also within the coun­try. We have so many agro cli­matic zones and good mar­kets, so prob­a­bly if we can get the in­dus­try and the trade en­trusted, I think trans­port can help there, that’s good if it hap­pens, be­cause I see an op­por­tu­nity there. Baran­wal: But don’t you want cargo in­dus­try to grow well? Min­is­ter: Yes, cargo in­dus­try needs a push, needs in­cen­tives and in­fra­struc­ture. The world over, most air­lines don’t make money from trans­porta­tion of peo­ple, what­ever they make it is from cargo. Baran­wal: So that off­sets the losses they are bear­ing? Min­is­ter: We hope they don’t go un­der losses. The world over that is hap­pen­ing in a lot of places and we can see that it can hap­pen here.

TAR­GET­ING HEALTHY GROWTH

Baran­wal: The DGCA (Direc­torate General of Civil Avi­a­tion) is yet to emerge as a pro­gres­sive or­gan­i­sa­tion as per the sen­ti­ments of the over­all in­dus­try. What steps are be­ing taken to make it more con­ducive to in­dus­try’s healthy growth? Min­is­ter: You see, the DGCA is a reg­u­la­tor and most reg­u­la­tors don’t en­dear them­selves to peo­ple, but they can be trans­par­ent in their ac­tions. Gen­er­ally reg­u­la­tors don’t en­dear them­selves to

trade be­cause it will be­come a com­pro­mise in safety. They are opaque and they need to be­come trans­par­ent and they need to be faster and con­ducive to growth. A reg­u­la­tor is nec­es­sary. You can’t throw a baby out of the bath wa­ter once the bath wa­ter goes, the clean baby re­mains so, and that is how we would like to see the DGCA as a cleaner or­gan­i­sa­tion.

Those are the kinds of steps we are tak­ing there to try to see the or­gan­i­sa­tion mod­ernises its think­ing and pulls it­self up.

THE 5/20 RULE: DOESN’T LOOK RA­TIO­NAL

Baran­wal: Air In­dia has now with­drawn its ob­jec­tion on the 5/20 rule. Does this pave way for faster growth of In­dia’s air­line busi­ness? Min­is­ter: It’s okay some air­lines ob­ject, some don’t. Ul­ti­mately, it’s the gov­ern­ment to take a de­ci­sion. Now why 5/20 was brought? What is the logic be­hind five years in 20 air­craft and who does it pull down? You can’t reg­u­late for­eign­ers, you only reg­u­late your­self, for what pur­pose? It is a de­ci­sion that did come out of the Cab­i­net, so any change it has to go back to them. Now po­lit­i­cally speak­ing, al­most no po­lit­i­cal party’s manifesto, re­gional or na­tional, has ever talked about avi­a­tion. There is a sen­tence in the BJP’s manifesto on re­gional con­nec­tiv­ity, so we are try­ing to keep the re­gional con­nec­tiv­ity thing as sacro­sanct, build­ing the pol­icy around it. Of course, as far as the 5/20 rule is con­cerned cer­tain peo­ple af­ter some­time will get used to a par­tic­u­lar thing, it gives a com­fort level or call it a dis­com­fort level. I think this is an im­ped­i­ment to the growth of In­dian avi­a­tion. No other coun­try in the world ever has this type of reg­u­la­tion. I am in­di­vid­u­ally con­vinced and I hope to con­vince my col­leagues fur­ther. Baran­wal: And this will en­able much faster growth on the do­mes­tic front. Min­is­ter: I think so, be­cause im­ped­i­ments are re­moved. Now what is this that they are call­ing level play­ing field. I went through hell so an­other fel­low has to also go through hell, oth­er­wise it’s not a level play­ing field be­cause I went through hell and he is not go­ing through hell. I don’t think that should be ac­cept­able logic here, we need to see that this in­dus­try grows. Some­one will ben­e­fit, some­one won’t ben­e­fit that’s okay, but for eter­nity I don’t think we can doom the things. That’s what I feel and ev­ery­body knows that I am not for the 5/20 in­di­vid­u­ally; I have voiced this at var­i­ous fo­rums too. So if I am able to con­vince my col­leagues then it can go.

MRO WILL BRING IN­DUS­TRY TO IN­DIA

Baran­wal: MRO: I be­lieve the draft pol­icy sounded very friendly to the in­dus­try – what all have been the plans to en­able the growth in this area? Min­is­ter: MRO is one place where In­dia has a lot to ben­e­fit. If we are able to bring in the pol­icy, we will get the in­dus­try into In­dia. Right now $700 mil­lion of In­dian busi­ness is go­ing to Sin­ga­pore, Dubai, Sri Lanka and when you in­ter­act with them they are giv­ing few things, one is the ser­vice tax and cus­toms for the Gov­ern­ment of In­dia. We in­ter­acted with the finance and cus­toms; they wanted time for spare parts to be changed to three years in­stead of one year right now. Cur­rently, they get it, and if they con­sume it within one year and they don’t have to pay the duty. They are ask­ing for three years time and in in­for­mal con­sul­ta­tions, they seem to un­der­stand the prob­lem. Also, the states will have to come out with their VAT prob­lem, so if the Gov­ern­ment of In­dia does that, then prob­a­bly this in­dus­try might move to states which are friendly. In Delhi, ev­ery­one is try­ing to bring down the ATF, the Delhi Gov­ern­ment has hiked it to five per cent. So like that you do have things hap­pen­ing. MRO will help us to get back busi­ness to our coun­try, with it our ‘Make in In­dia’ will be­come more vi­brant, we are work­ing on that.

GA/BA OPEN TO DIS­CUS­SIONS

Baran­wal: It will save lot of money out­flow from the coun­try. Re­gard­ing general avi­a­tion and busi­ness avi­a­tion, the in­dus­try still feels that they are be­ing treated as a stepchild? Min­is­ter: General avi­a­tion is in­ter­est­ing; we got some of their re­ac­tions. Why is it that, what is it they want, what is it we can do? Like if they say I want park­ing in a place like Mum­bai, it is al­ready con­gested. Like they say I don’t mind park­ing in a place like Bhopal, for in­stance, you have 12 air­craft you can park si­mul­ta­ne­ously, no prob­lem 12 big ones. What is this they ex­actly want? Neetu Dhu­lia (Dhu­lia): If they come up with req­ui­site so­lu­tions, would you be open to it? Min­is­ter: My god! I will wel­come ev­ery­body. Why should I say no for it? Dhu­lia: Would you wel­come if the in­dus­try jointly wants to come and voice their thoughts? Min­is­ter: You see voic­ing is okay, I even put the draft pol­icy on the In­ter­net and re­quested, please re­spond whether we agree or dis­agree. We can al­ways agree on some­thing and dis­agree on an­other thing, but we have to un­der­stand your prob­lem. Dhu­lia: If they raise the prob­lem and seek the sup­port, would the gov­ern­ment look into it ad­dress­ing the is­sues?

“AS FAR AS THE 5/20 RULE, I THINK THIS IS AN IM­PED­I­MENT TO THE GROWTH OF IN­DIAN AVI­A­TION. NO OTHER COUN­TRY IN THE WORLD EVER HAS THIS TYPE OF REG­U­LA­TION.”

Min­is­ter: Why not if they can raise any­thing and I am sure we will look into it. Dhu­lia: Could we be in­stru­men­tal and bring­ing them to­gether to have a dis­cus­sion with them? Min­is­ter: If you are will­ing to send the ideas across we can try to un­der­stand them and then if we find it nec­es­sary we can al­ways in­ter­act, af­ter all we are In­di­ans, we are not dif­fer­ent coun­tries war­ring with one an­other. So general avi­a­tion feels like a stepchild, why is that I need to know?

GA/BA TAX­A­TION

Baran­wal: The level of tax­a­tion they say on the air­craft is very high un­like any coun­try in the world. Min­is­ter: Yes, that must be there, be­cause gen­er­ally sched­uled air­lines are given ben­e­fit be­cause they are un­der­stood to be the com­mon man’s way of trans­port. General avi­a­tion has prob­a­bly given this im­pres­sion that it is only rich man’s trans­port and that im­pres­sion stays. So any­way what­ever it is, they might be hav­ing other ap­pli­ca­tions also, and we need to look at that. Baran­wal: Yes other ap­pli­ca­tions, the busi­ness ex­pan­sion, mov­ing from one point to the other, like a busi­ness tool, con­tribut­ing back to the econ­omy. Min­is­ter: Ul­ti­mately, avi­a­tion ben­e­fits from the econ­omy. It also gives back to the econ­omy. In that sense, avi­a­tion in general terms is that. Be­cause, the econ­omy ap­pears to have be­haved, your growths are there, oth­er­wise it would not have been.

THE ` 2,500 CAP

Min­is­ter: Re­gard­ing “Re­gional Con­nec­tiv­ity”, I told you al­ready that this one is in the manifesto, we are kind of look­ing at it like a sacro­sanct thing. That is why it’s in the pol­icy we are look­ing at the cer­tain sug­ges­tion which ex­cited the think­ing of many peo­ple, won’t it be pos­si­ble to pay for an hour of fly­ing at 2,500. Baran­wal: There has been some de­bate on that 2,500 cap. Min­is­ter: It’s not a cap, it’s not a floor, it’s a sug­ges­tion. Caps and floors are dan­ger­ous. Re­gional con­nec­tiv­ity is what you are think­ing. The Air­ports Au­thor­ity of In­dia (AAI) it­self has about 30 air­ports un-served, even today. Now how do you start a ser­vice there? Oth­er­wise, it’s a non-per­form­ing as­set; we want them to be­come per­form­ing as­sets be­cause they will con­trib­ute to the econ­omy. How to do that, that’s the thing any­way, the work is go­ing there.

DATE OF NEW CIVIL AVI­A­TION POL­ICY

Baran­wal: When can we ex­pect the new pol­icy? Min­is­ter: The new pol­icy has now come to an ad­vanced stage. One or two things that we are try­ing to iron out, then, it will go to the in­ter-min­is­te­rial con­sul­ta­tion and then the Cab­i­net be­cause cer­tain de­ci­sions have come out from the Cab­i­net in the past. We would like to push it soon.

In­dus­try is Wel­come: Union Min­is­ter of Civil Avi­a­tion P. Ashok Ga­jap­athi Raju dur­ing the in­ter­ac­tion

Source: DGCA

Sil­ver­lin­ing: Min­is­ter be­lieves that MRO will bring in more vi­brancy within the in­dus­try with the help of ‘Make in In­dia’ ini­tia­tive

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