Indian aviation is no more a rich man’s prerogative and growth will continue on high trajectory in the new year, Union Minister Ashok Gajapathi Raju said as the sector saw the much-needed reforms taking off in 2016 with new policy and ambitious regional connectivity plans.
2016 bloomed as a “very meaningful year” with over 20 per cent domestic air passenger growth while scrapping of the once famous ‘5/20’ overseas flying norms and relaxing of FDI rules added to the sector’s mojo.
Turning operationally profitable in the last fiscal provided the much-needed impetus to Air India amid stiff competition among domestic carriers in 2016 even as they reaped benefits of lower oil prices — a scenario unlikely to remain the same next year with changing geopolitical vibes.
Against this benign backdrop, passengers have a lot to cheer with airlines — from budget to full-service ones — coming up with discounted ticket prices as they look to fill more seats even as many ancillary services come at a price.
Also, biometric access for passengers has been tested at Hyderabad International Airport while tag-free hand baggage system is being tried at various airports.
As Civil Aviation Minister Ashok Gajapathi Raju remarked about the aviation sector, “It is a win-win situation.”
All said and done, the sector’s trajectory had its share of air pockets with the abrupt sacking of Airports Authority of India (AAI) Chairman R K Srivastava as well as confusing signals over possible capping of air fares, an issue that has lost steam.
As the year wound down, this week’s incident of 15 fliers getting injured after a Jet AirwaysBSE 1.58 % flight veering off the runway at Goa airport and two planes coming close to collision at the Delhi aerodrome stoked concerns over safety.
Buoyed by high passenger growth numbers and headway in bridging the skill gap, Raju described 2016 as a “rather significant and a very meaningful year” for the aviation sector.
Asserting that flying is “no more a rich man’s prerogative”, Raju, known for keeping a low profile and speaking his heart, said more people are flying and that India is the world’s largest growing aviation market.
“Things are much better than what they were. Of course, the scope for improvement is a continuous process. Wherever you are, there is always scope for improvement,” he told PTI in an interview.
“This growth is not going to be for eternity… Once you reach your levels, there will be a flattening out of growth, but India has scope for growth and we will continue to grow. There is no reason why we should not grow,” he noted.
After years of much back and forth, the government in June finally came out with the much-awaited and talked-about national civil aviation policy.
The framework, rolled out for the first time since Independence, seeks to propel sectoral growth across segments — airlines, airports, cargo and MRO (maintenance, repair and overhaul), to name a few. In addition, various measures for improved ease of doing business and passenger-friendly ways are there.
Seen as a millstone for the new-age domestic airlines, 2016 saw the government doing away with the ‘5/20’ norm whereby only those carriers having five years of operational experience and minimum of 20 planes were allowed to fly overseas.
Paving the way for more foreign funds inflows into the aviation space, non-airline players can put in up to 100 per cent FDI in local carriers.
At the same time, UDAN (Ude Desh Ka Aam Naagrik) — the ambitious regional connectivity plan to make flying more affordable by connecting unserved and under-served airports — is in the air with the wow factor.
The scheme, most likely to practically take wing next month, would see fares being capped at Rs 2,500 for one-hour flights. But on the flip side, a levy of Rs 8,500 per flight on busy routes to fund the regional connectivity scheme has ruffled feathers of established domestic players even as the government is targeting long-term benefits.
Staying with passengers, the government revised the compensation upwards for flight delays and cancellations, apart from rolling out digital complaints filing system — AirSewa — with the promise of speedier redressal.
For the first time in 10 years, flag carrier Air India posted Rs 105 crore operational profit for 2015-16 while its subsidiary and international budget arm, Air India Express also flew into the black by making a net profit of Rs 361.68 crore in the previous fiscal.
The airline also created history by launching the world’s longest flight on the Delhi-San Francisco route over the Pacific Ocean.
The Naresh Goyal-promoted Jet Airways, which saw an accident at the fag end of the year after its Boeing 737 plane skidded on the runway at the Goa airport just prior to take off for Mumbai, moved its European gateway to Dutch capital Amsterdam from Brussels after nearly nine years of operating flights from the Belgian capital.
During the year, budget carrier IndiGo became the first Indian airline to operate the fuel-efficient A320 Neo plane while its peer GoAir became eligible for international operations as it inducted the much-needed 20th aircraft, an Airbus A320 Neo, into the fleet. It also received government’s permission to fly to nine international airports, including Iran and Uzbekitan.
2016 also saw a new regional airline — Air Carnival — taking off while Air Pegasus was forced to ground its operations. The latter’s flying permit has also been suspended by aviation regulator, DGCA. Around the same time, Air Costa shed its regional tag and joined the league of pan-India operators as DGCA granted it national operator’s permit.
The slugfest between Tata Sons and Cyrus Mistry, who was unceremoniously removed as Chairman at the salt-to-software conglomerate in late October, brought the alleged irregularities at no-frills carrier AirAsia India to the fore.
Tatas hold 51 per cent stake in AirAsia India and the rest is held by Malaysian budget airline AirAsia.
Mistry alleged that there were fraudulent transactions worth Rs 22 crore in AirAsia India, prompting launch of a probe by the Enforcement Directorate. Incidentally, the airline also saw top deck reshuffle in March with its then CEO and MD Mittu Chandilya quitting the airline and Amar Abrol stepping into his shoes.
Less than a week after the unveiling of the National Civil Aviation Policy in June, the government launched other significant reforms by allowing foreign investors barring overseas airlines to invest up to 100 per cent stake in local carriers. Besides, it relaxed the norms for foreign direct investment in brownfield airports with an objective to attract more funds into the sector.
About the aviation sector this year, Raju said that under-utilisation of skill in infrastructure is gone and hoped that skill mismatch which was earlier apparent and visible will be a thing of the past.
“For Air Navigation Services (ANS), recruitments are over and training most of them is in place. Problems generated due to drift are over… You had to recruit 800 ANS (people), no wonder, there were problems everywhere. Those problems are coming down,” he said.
In an apparent dig at critical voices against demonetisation impacting growth of aviation, Raju said such people have been proved wrong.
“Somebody told me that demonetisation is going to affect growth. Obviously, it has been proved wrong. I was telling them that it is no longer a rich man’s prerogative and lot of cashless transactions happen. People don’t travel for nothing, they have something in mind,” he noted.
Admitting that the sector has to be prepared to sustain the high growth, the minister said aviation has a multiplier effect on economy. “For every job generated here and if it works properly, six jobs outside in the economy. If 100 jobs are created here, then 600 (jobs) there. It is a win-win situation,” he emphasised.
Raju got a new deputy in place of incumbent Mahesh Sharma after Prime Minister Narendra Modi in his second Cabinet reshuffle brought in investment banker-turned politician Jayant Sinha as the Minister of State for Civil Aviation at the Rajiv Gandhi Bhawan here, which houses the ministry.
Not very far from there, the Directorate General of Civil Aviation saw B S Bhullar, an additional secretary in the ministry, being appointed as the new Director General after the first woman DGCA M Sathiyavathy was made Secretary at the labour ministry.
On the regulations side, for the first time, criminal proceedings were initiated against the pilots of Jet Airways and Air India after they were found drunk in the post-flight alcohol test by their respective airlines. Also, it launched action against the CEO of a private MRO operator, besides scores of aircraft maintenance engineers of several MROs, for carious safety violations at the hangars.
As stated in the new aviation policy document that the government will go in for ‘Open Sky’ policy arrangement on a reciprocal basis with SAARC countries and those beyond 5,000 km from Delhi.
While the plan for Wi-Fi onboard flight is floating in the air, it will take time to be a reality with consensus and sorting out of security issues still some miles away. Similar is the situation with regard to allowing commercial use of unmanned aerial vehicles, including drones.
As the new year dawns, so do the dreams of more operational airports with airlines ferrying more number of Aam Aadmi. Damarious Randall JerseyShare This