Flawed Indian flight reforms face uphill struggle
Since the days of India’s independence New Delhi has treated aviation as a luxury business that caters mainly to the rich and powerful, and has little relevance to the common man. But prime minister Narendra Modi’s government has this month revealed an aviation policy that treats flying as an important economic activity. This should be good news for airlines operating in India — whether it is domestic companies such as IndiGo, the budget carrier, or Air Asia India, an affiliate of Malaysian entrepreneur Tony Fernandes’s group. But the government’s new policy and a related initiative on reform of foreign ownership rules offer some protection for domestic carriers against overseas rivals that have entered the market in recent years. The declared aim of the aviation policy is to “take flying to the masses, by making it affordable and convenient”. The policy outlines a goal for India to have 300m domestic passenger trips a year by 2022, and 500m by 2027, up from 81m last year. “The fundamental reason why aviation has not gotten policy support earlier is that the government treated it as an elitist mode of transport,” says Amber Dubey of KPMG’s India unit. “The attempt now has been to deglamourise it and take it to the masses.” Yet in spite of the Modi government’s ambitious vision of enabling the common man to fly, some analysts are expressing dismay with its new aviation policy. They say it fails to grapple with the aviation sector’s most vexing problems — notably high taxes on jet fuel, overcrowding at big airports and a weak industry regulator. “It’s a clear missed opportunity and a significant disappointment,” says Kapil Kaul of the Centre for Aviation, a consultancy. The policy is “ambitious about growth, but has not focused on creating structures for managing growth”, he adds. Kaul also says the government has failed to strengthen the directorate-general of civil aviation, the industry regulator responsible for safety. Critics say the watchdog is understaffed, and accuse the government of failing to make plans to expand India’s urban airports.<br/>
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Flawed Indian flight reforms face uphill struggle
Since the days of India’s independence New Delhi has treated aviation as a luxury business that caters mainly to the rich and powerful, and has little relevance to the common man. But prime minister Narendra Modi’s government has this month revealed an aviation policy that treats flying as an important economic activity. This should be good news for airlines operating in India — whether it is domestic companies such as IndiGo, the budget carrier, or Air Asia India, an affiliate of Malaysian entrepreneur Tony Fernandes’s group. But the government’s new policy and a related initiative on reform of foreign ownership rules offer some protection for domestic carriers against overseas rivals that have entered the market in recent years. The declared aim of the aviation policy is to “take flying to the masses, by making it affordable and convenient”. The policy outlines a goal for India to have 300m domestic passenger trips a year by 2022, and 500m by 2027, up from 81m last year. “The fundamental reason why aviation has not gotten policy support earlier is that the government treated it as an elitist mode of transport,” says Amber Dubey of KPMG’s India unit. “The attempt now has been to deglamourise it and take it to the masses.” Yet in spite of the Modi government’s ambitious vision of enabling the common man to fly, some analysts are expressing dismay with its new aviation policy. They say it fails to grapple with the aviation sector’s most vexing problems — notably high taxes on jet fuel, overcrowding at big airports and a weak industry regulator. “It’s a clear missed opportunity and a significant disappointment,” says Kapil Kaul of the Centre for Aviation, a consultancy. The policy is “ambitious about growth, but has not focused on creating structures for managing growth”, he adds. Kaul also says the government has failed to strengthen the directorate-general of civil aviation, the industry regulator responsible for safety. Critics say the watchdog is understaffed, and accuse the government of failing to make plans to expand India’s urban airports.<br/>
