Capping is not the answer to deal with rise in airfares: Ashok Gajapathi Raju
THE CIVIL AVIATION MINISTER
P. Ashok Gajapathi Raju has said that to deal with steep rise in airfares, capping would not be the answer as it would also push the floor prices up. Inaugurating the 9th International Conference & Awards on Civil Aviation and Tourism, organised by ASSOCHAM (Associated Chambers of Commerce and Industry of India) recently, the Minister said that the Ministry had done an analysis which showed that 1.7 per cent of the tickets sold were of high cost.
“The last minute high prices of tickets is a matter of concern. But we should not land up in a situation that pushes the price of tickets for over 90 per cent of passengers for the benefit of 1.7 per cent.”
Speaking at the conference, the Secretary of Civil Aviation, Rajiv Nayan Choubey said, “The civil aviation policy is just the beginning. We wish to stay ahead of the growth curve and if we fall behind the growth curve, for example, as it happened in case of urban development in the country, there will be aviation chaos in the skies, airports....”
There are a couple of areas which require immediate attention like how to reduce the cost of leasing. If the cost of leasing remains high either because of capital or any other procedural requirement, regional connectivity may find it difficult in taking off, hence we are committed to exploring ways to reduce the cost of leasing, added Choubey.
Choubey further said if the crude price remains soft for the next four-five years, regional air connectivity would have found very strong roots in India. The Civil Aviation Ministry would look at the possibility of utilising certain unused airports for the purpose of parking aircraft and use aerodromes for plane-breaking or dismantling of old aircraft. There are around 400 unused airports and airstrips across the country.
He said: “In the last four-five months, we have interacted with aircraft manufacturers from all over the world where they could clearly see the scope of hundreds of small planes coming to the country in next three to five years”.
Firstly, to sell aircraft in India, they need to sell an ecosystem and should have elements that are excellent aircraft and fuel-efficient. Secondly, it should also have maintenance facilities which should be created in the country or maybe tie up with MROs and make sure that the maintenance happens in the country. Thirdly, they must also come with training infrastructure for the cabin crew and for corporate groups. They must tie up with the institutes which are already here or set up their own. Lastly, they must bring very attractive leasing packages, said Choubey.
Ajay Singh, Chairman and Managing Director of SpiceJet Limited, said that “aviation sector will grow only if we are able to constantly work to reduce the cost of aviation in India. We have to bring down the cost and stimulate this market with low fares. The 20 per cent growth we have seen today is the consequence of reduction in fares from last year to this year and that must continue if you want to see the sector growing.”
Rana Kapoor, Managing Director & CEO of Yes Bank, said, “It is indeed a great honour and privilege to be recognised for our contribution to promoting tourism. The award is a true recognition of Yes Bank’s decadelong relentless focus on providing innovative solutions to key sunrise sectors of the economy like tourism and hospitality, which go beyond the traditional realm of banking and help unlock the enormous potential of the sector. The award will surely strengthen Yes Bank’s endeavour in championing significant policy changes at various forums, aimed at the holistic development of the sector and unleash the sector’s untapped potential.”
At the programme, Airbus was given the award for being the best global aviation company; Pawan Hans for promoting remote and regional connectivity; GMR Delhi for best airport; SafeExpress for the best air cargo logistics; Yes Bank for best banker promoting tourism; Club One Air for the best luxury jet charter Frankfin for the best airhostess training institute; and SpiceJet for the Swift Turnaround airline company.
Others who spoke during the conference were Dr B.P. Sharma, Chairman and Managing Director, Pawan Hans Limited; Zhang Zhihong, Cultural Counsellor, China Embassy; Dr Srinivasan Dwarakanath, President, Airbus Division in India; Amber Dubey, Partner and Head, Aerospace and Defence, KPMG in India; Vinod Bahety, Senior President, Yes Bank; K. Narayana Rao, Chairman, ASSOCHAM National Council on Civil Aviation; and D.S. Rawat, Secretary General.