• Govt mulls second airports at cities where primary airports are saturating

    The Modi government will start work on a plan to build second airports at all airports, where the primary airports have saturated or reaching saturation, a government official announced at an ET event.

    “That is a very valid suggestion. We are thinking about it, as Airports Authority of India (AAI) has its hands full. The management of Ahmedabad and Jaipur airports are being awarded under public-private partnership (PPP). The line of thinking is there but nothing is concrete as of now,” Anil Srivastava, joint secretary, civil aviation ministry told at a panel discussion at Economic Times Global Business Summit.

    Srivastava’s response was to a question by panel moderator Amber Dubey, head of aviation and aerospace at KPMG.

    Apart from Srivastava and Dubey, the panel constituted Ashwani Lohani, CMD, Air India, Rajiv Jain, CEO, Mumbai International Airport Ltd (MIAL), Kapil Kaul, CEO and Director at Centre for Asia Pacific Aviation, Palash Roychowdhury, Managing Director, Pratt & Whitney (P&W), Ajay Mehra, Managing Director, Airbus and K S Kunwar, Director General, Air Cargo Forum India.

    The panel discussed ‘Regional connectivity and affordable airline solutions’ and suggestions ranged on making the regional connectivity scheme simplified and developing secondary airports to make the scheme successful.

    “If we plan to go to take regional connectivity to the hinterland of this country, we will have to reduce costs,” said Air India CMD Lohani.

    P&W’s Roychowdhury also says that the focus should be on keeping ‘lower cost, cost and cost.’
    “Regional Connectivity Scheme (RCS) will be a game changer but needs to be simplified.

    The payment of subsidy should be on per flying hour basis rather than per seat basis,” Lohani added.

    The government had, in June last year, announced a new aviation policy that aimed at providing regional connectivity in the country. The programme, Ude Desh ka Aam Nagrik (UDAN), offers carriers cash subsidies for selling up to 40 seats at Rs 2,500 for each hour of flight. About eleven airlines, including AI, have bid to connect 43 regional airports in the country in the first phase. The winners will be announced on Thursday.

    MIAL CEO Jain also feels that developing airport infrastructure is a minimum requirement for this scheme to turn successful.

    “There are five regional routes out of Maharashtra – 5 into Mumbai and one each into Pune and Hyderabad – all three are congested airports. Secondary airports, away from larger airports, should be created and treated as hubs for regional flights,” said Jain.
    However, aviation industry insiders like Kaul and Mehra expect a lot of hurdles in the scheme becoming a success.

    “The government has both opportunity and challenge at hand. Bids have to be careful or we may see bid failure. The government also needs to expedite the regulatory approval process from the aviation safety regulator like DGCA and security regulator like BCAS. We may have an army of airline failures over 6 to 12 months (post the start of regional connectivity scheme),” said Kapil Kaul, CEO at CAPA.

    Airbus’ Mehra also says it will be difficult for regional airlines to lease planes. “Leasing companies may not look at leasing to commuter or regional airlines,” said Mehra. Sammie Coates Authentic Jersey

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