Last Updated: July 9 2021
The new Civil Aviation Minister Mr. Jyotiraditya Scindia is shouldered with responsibilities of one of the worst affected sectors due to the pandemic. Some of the immediate challenges for the new minister are :
Transition to Free Market: The industry has been under a capacity cap as well as a floor and ceiling price for airfares since flights resumed on May 25, 2020. No other industry has been put under such barriers post-Covid and it may prove to be detrimental in the long run. A smooth transition to the free market is in the larger interest of the sector.
Air India Disinvestment: The investment climate has changed a lot since the topic was first discussed. While it is often said that we are in the last stages and a winner may be announced in the next couple of months, it remains unclear how many made it to this stage and what will be the way forward.
Regional Connectivity Scheme: A pet scheme of the prime minister, RCS-UDAN has not seen the kind of success which it should have. After multiple rounds of bidding, the operational routes remain less than 50 percent of what was bid out.
Airlines like Air Deccan, Air Odisha have gone belly up while Spicejet has cancelled multiple routes which it started. The aim of having 100 new airports (including seaports and heliports) is also turning out to be a pipedream.
Privatisation of Airports: While privatisation has been in the pipeline for a while, reduced air traffic amid the coronavirus pandemic means it would be difficult to attract more players, even as the Adani Group had earlier won the concession agreement at some airport. But even here, there is a delay in take-over of airports as the next set of privatisation of airports started rolling just before the pandemic hit.
Airport Infrastructure: According to the report, the airport infrastructure in the country was being utilised at its peak pre-pandemic. Mumbai has run out of capacity and the case is no different at most other airports which are in top 15 in the country. Lack of space to expand civil enclaves at defence airports has meant that flight operations can’t grow beyond a limit at Pune, Goa, Vizag, Port Blair and Jammu amongst others, the MC report further stated.
ATF: The demand to move Aviation Turbine Fuel (ATF) under the GST regime has been on for years together. Even before GST was implemented, there were demands to have a flat rate of taxation across the country. Neither has happened. As fuel prices start inching upwards, it is causing more pain for the airlines than ever before.
Air Safety: India experienced a fatal crash last year in Calicut after a long gap. An audit from ICAO and US regulator FAA is on the horizon but the report is still pending. Any adverse observations will lead to airlines from India not being able to add new routes to the United States, the report said.
All eyes are now on Mr. Scindia on how he navigates through for a smooth landing amid the rough weather of Covid-19.
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