A Promising Future!

The year 2016 has indeed been truly eventful for the Indian civil aviation industry and it will certainly go down in its history as one that ushered in a new dawn for the industry that had for the major part of its existence, been engaged in a relentless struggle for survival. It was for the first time in the history of the nation since its independence that in the month of June this year, the Government of India came up and implemented an integrated National Civil Aviation Policy that was crafted to provide an ecosystem for the harmonised growth of the different subsectors of the Indian civil aviation industry namely the airlines, airports, air cargo, maintenance, repair and overhaul (MRO) services, business and general aviation, aerospace manufacturing and skill development. The major focus of the National Civil Aviation Policy however was on regional aviation, a segment of the industry that had the potential to provide the next phase of growth; but had thus far remained largely neglected.

The new policy has provided for what has been termed as the Regional Connectivity Scheme to make available the facility of air travel to the large segment of the population that resides in the hinterland and the remote areas of the country not easily accessible by surface transport. This scheme also branded as ‘Ude Desh ka Aam Naagrik’ or UDAN for short, envisaged creating massive infrastructure by upgrading capacity of airports, building low-cost greenfield airports and activating the large number of airstrips currently not in use. The scheme also catered for ensuring financial viability through Viability Gap Funding (VGF) for regional carriers who opt to be a part of the scheme and operate to regional destinations. The response from the regional carriers has so far been encouraging.

Under the new government led by Prime Minister Narendra Modi, the Indian civil aviation industry is indeed fortunate that it is endowed with leadership that is proactive, decisive and forward looking. Headed by the dynamic and proactive Minister of Civil Aviation P. Ashok Gajapathi Raju, duly supported by the Minister of State for Civil Aviation Jayant Sinha and a very competent and result oriented Secretary, Ministry of Civil Aviation, R.N. Choubey, it is probably for the first time that the political and bureaucratic leadership has been interacting with the captains of the Indian civil aviation industry and are prepared to not only listen to their problems, but genuinely appreciate their difficulties and take appropriate steps to resolve issues. Abrogation of the controversial 5/20 rule is one vivid example of their resolve to set things right in the industry. And of course creating the resources to support regional carriers through VGF is another.

One issue that has been pending for long is the privatisation of the national carrier Air India. In a recent interview, the Minister of Civil Aviation Gajapathi Raju indicated that the government was exploring ways and means of easing the massive debt burden of the national carrier Air India. In order to achieve this, the government is even willing to talk to parties that might be interested in picking up stake in the airline. While complete privatisation of the only state-owned airline in the country may still be a distant dream, the Ministry of Civil Aviation appears inclined to involve the private sector in the management of this lossmaking national carrier and effectively complete the turnaround of the airline initiated a few months ago.

The effort by the Ministry of Civil Aviation to transform the Indian civil aviation industry has produced results that are evident in the sustained rate of growth of passenger traffic which has been in the region of 20 per cent per annum. The government aims to propel the Indian civil aviation market from its current position of ninth to the third largest in the world in the next few years. Passenger traffic is also expected to grow from the current level of 150 million per annum to 500 million per annum. With an enlightened and aggressive leadership and sustained effort by all the stakeholders in the industry, the objectives set for it to achieve are not beyond the realm of possibility. In conformity with the vision of the Modi-led government, the Indian civil aviation industry too may finally witness good days ahead!