Tough task as aviation sector in crisis
Several challenges in the aviation sector await RLD leader Ajit Singh, who is likely to be sworn in soon as civil aviation minister replacing Congress veteran Vayalar Ravi who had taken over additional charge of the ministry in January
this year. The aviation sector is currently in deep financial crisis due to soaring prices of aviation turbine fuel (ATF), and almost all airlines are incurring heavy losses. The main challenges are:
n The airline industry has been demanding that ATF be put in the declared goods category by the Union government that will attract only a low uniform rate of four percent sales tax. Currently, states levy various rates of sales tax on ATF. ATF accounts for 45 per cent of the operating cost of airlines which consider soaring ATF prices as the main reason for their financial crisis.
n National carrier Air India has been financially bleeding for the past few years. The ministry will need to oversee a firm plan to put the national carrier back on the rails and infuse as much as `30,000 crore into the carrier in the next 10 years.
n Private airlines such as Kingfisher have sought more financial relief from banks in view of the serious financial crisis. The ministry will need to consider what policy decisions can be taken to help financially revive private airlines as well without allocating taxpayers’ money as part of any bailout.
n The modernisation of Kolkata and Chennai airports by state-run Airports Authority of India has been delayed. The government will have to ensure that the scale of modernisation of these airports matches the airports that are operated by private-led consortia. Important projects for development of non-metro airports are also being carried out.
n Severe staff shortages are currently being faced by crucial aviation organisations such as aviation regulator DGCA and aviation security body BCAS. The ministry will have to ensure that the pace of recruitment is increased since the working of DGCA has a bearing on aviation safety in the country while BCAS oversees aviation security.
n In the wake of the earlier Mangalore crash of an AI Express aircraft and a few helicopter crashes of state-owned Pawan Hans helicopters, the ministry will have to focus more on ensuring that aviation operators follow all rules pertaining to aviation safety. Increase in number of safety inspections and strict action against defaulters is crucial.
n A policy needs to be put in place for ensuring that Indian carriers fully utilise bilateral aviation rights that the carriers are entitled to.
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