Report recommends development of around 20 airports in Tier II and Tier III cities
New Delhi, October 8, 2014:YES BANK, India’s fourth largest private sector Bank, in a strategic association with ASSOCHAM, India’s apex industry body, today released the “Civil Aviation - Developing Remote & Regional Connectivity” report. The report was launched at the 7th International Conference on Indian Civil Aviation, by the Chief Guest Shri. Anil Srivastava, IAS Joint Secretary (AS), Ministry of Civil Aviation. The report provides an in-depth analysis of the Civil Aviation Sector in India.
Mr. Rana Kapoor, Managing Director & CEO, YES BANK and President, ASSOCHAM, said, “Indian Aviation sector is set for a quantum leap in the coming years and has the potential to become the world's 3rd largest aviation market by 2020. The industry has steered in a new beckon of expansion driven by Low Cost Carriers (LCC), modern airports, cutting edge Information Technology (IT) and a growing emphasis on regional connectivity. With an estimated investment of USD 98 billion by 2030-31, I believe, the next phase of growth in India’s Aviation sector is expected to be fuelled by connectivity to Tier II and III cities. Hence, low-cost approach for developing airport infrastructure is the need of the hour and an optimal route to quickly build a network of regional airports for connecting remote and regional destinations will spur global tourist inflows. I am pleased to present the ASSOCHAM - YES BANK Knowledge Report 'Civil Aviation – Developing Remote and Regional Connectivity' that outlines the future roadmap for transforming the Indian skies through a comprehensive development policy over the next 20 years.”
Key takeaways of the knowledge report
‘Civil Aviation - Developing Remote & Regional Connectivity’
Advancement of cities and subsequent infrastructure to support commercial aviation activities is highly critical to the growth of the Civil Aviation Sector in the country. Developing airport infrastructure is a capital-intensive process, requiring significant resources to fund land acquisition, airfield & terminal development and supporting infrastructure to successfully meet requirements of airlines as well as service demands of passengers. Following are some key recommendations made in the report:
Immediate / short term objectives:
- Encourage the growing private sector participation essentially through Public Private Partnership (PPP) models
- Lay more emphasis on 'Aerotropolis' model to enhance revenues, especially from non-aeronautic avenues like retail, advertising and vehicle parking
- Overcome regulatory challenges with respect to approvals for setting up MRO business and reduce the procedural delays with respect to import of spares parts and components
- Fast-track the process of awarding airport management contracts to bring in efficiency and improve the facilities at existing airports
- Reduce the lack of transparency in the procedural aspects of the industry which results in lack of cost competitiveness over other modes of cargo transportation
Medium / long term objectives:
- Develop around 20 airports in Tier II and Tier III cities and spend USD 1.3 billion on non-metro airport projects over next 5 years
- To mobilize the stagnated growth through resolving issues like pricing policies, taxation structure of Aviation Turbine Fuel (ATF), high airport charges, limited connectivity in Tier II and III cities and infrastructure bottlenecks
- Improve the availability of hangar space at key international airports enabling Indian MROs to tap into the larger potential market of Aircraft's operating within 5–6 hours of flying distance from India
- Strengthen the network of third party MRO service providers by modifying the huge tax implications
- Restructure RDG such that routes with high and medium Passenger Load Factor (PLF) subsidize each other and routes with low PLF be supported by establishing a Regional Air Connectivity Fund (RACF)
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