Lok Sabha Question No. 227 (STARRED), answered on 2018-08-02
Subject: Major Challenges in Aviation Sector
Ministry: CIVIL AVIATION
Asked by: N.K. PREMACHANDRAN

## GOVERNMENT OF INDIA MINISTRY OF CIVIL AVIATION

STARRED NO. : 227

## LOK SABHA

(To be answered on the August 2018)

## MAJOR CHALLENGES IN AVIATION SECTOR

## *227. SHRI NK PREMACHANDRAN

## Will the Minister of CIVIL AVIATION

be pleased to state:-

- (a) whether the Government has identified the major challenges in the aviation sector of the country, if $0, the details thereof and the action taken by the Government to reduce the operational cost;
- (c) whether the Government proposes to increase the maintenance facility of aircraft and if so, the action taken thereon;
- (b) whether the Government proposes to supply the Aviation Turbine Fuel at reasonable price, if s0, the details thereof along with the reasons for high service tax and other charges and the action taken to reduce the same;
- (d) whether the airlines in the country are facing competition from foreign airlines and if s0, the details of study, if any, conducted in this regard; and (e) whether the Government proposes to develop the airports 50 aS to avoid the congestion at airports and if s0, the action taken thereon?

## ANSWER

Minister of State in the Ministry of CIVIL AVIA TION

(a) to (e): A statement is laid on the table of the House.

(Shri Jayant Sinha)

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STATEMENT IN RESPECT OF LOK SABHA STARRED QUESTION NO. 227 TO BE ANSWERED ON 02.08.2018 REGARDING "MAJOR CHALLENGES IN AVIATION SECTOR"

i.Regional connectivity\_

(a): Civil Aviation is a sector which requires continuous adjustment according to global & domestic needs and various challenges being faced by the Industry. The Government has constantly been responding to changing scenario and undertaking sector specific measures First ever National Civii Aviation Policy (NCAP-2016) to drive growth in the aviation sector leading to unprecedented growth on every metric: passenger traffic, planes in operation; planes ordered; cargo tonnage; passenger satisfaction, number of operational airports, airport capacity, and investment in future airport capacity was launched on 15.06.2016. NCAP 2016 covers the following policy areas:

i.Safety iv.Route Dispersal

iii.Air Transport v.5/20 Requirement for International Operations

vii Code-share agreements vi.Bilateral traffic rights`

viii Fiscal Support

XAirports Authority of India ix.Airports developed by State Govt, Private sector 0r in PPP mode

xi.Air Navigation Services xiii Helicopters

xii.Aviation security; Immigration and Customs xiv.Charters

xvi Ground handling xv Maintenance, Repair and Overhaul

xvii.Air-cargo xviii Aeronautical 'Make in India'

xxi Essential Services Maintenance Act; 1968

(b): The pricing 0f Aviation Turbine Fuel (ATF) was deregulated with effect from Ist April; 2001 and the Public Sector Oil Marketing Companies (OMCs) take appropriate decision on pricing of ATF in line with its international and other market conditions. However; as per the provisions of Article 279 A (5) of the Constitution of India (inserted by the Constitution (one Hundred and First Amendment) Act; 2016), the Goods and Services Tax Council shall recommend the date on which Gocds and Services Tax shall be levied 'on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel. price

(c): Given our technology and skill base; the government is keen to develop India as an MRO hub in Asia, attracting business from foreign airlines. Accordingly, the following provisions were made in the Budget announcements for 2016-17 :

- ii) MROs were required te provide proof of their requirements of parts; or orders from their client airlines. The process for the clearance of the parts has been brought in line with that of the tool kits for a one time certification by DGCA approved Quality Managers in MRO's
- i) The tools and tool-kits used by the MRO have been exempted from Customs duty: The exemption shall be given o the basis of list the tools and tool kits certified by the Directorate General 0f Civil Aviation (DGCA) approved Quality Managers of aircraft maintenance organisations
- iii) To enable economies of scale; the restriction of one year for utilization of duty free parts has been extended to three years:
- v) Foreign aircraft brought to India for MRO work will be allowed to stay for the entire period of maintenance or up to 6 months, whichever is lesser, provided it undertakes no commercial flights during the stay period. The aircraft may, however carry passengers in the flights at the beginning and end of the period in India. stay
- iv) To allow import of unserviceable parts including aircraft components like engines and landing gears by MROs for providing exchangeladvance exchange, the concerned notification has been revised to enable advance export of serviceable parts:

(d): No such study has been carried out this Ministry: by

(e): A comprehensive aviation capacity expansion program, NABH (NextGen Airports for Bharat) Nirman, as announced in the Union Budget 2018, is intended to develop sufficient airport and air space capacity. NABH Nirman; a multi-year program; envisages to expand India'$ aviation capacity 4 to 5 times to serve a billion passenger trips a year:

This program includes overall passenger growth projections, detailed passenger forecasts for all major airports, new regulatory approaches for greenfield and brownfield airports, collaborative urban and iand planning frameworks with various states, and necessary financing to build out aviation capacity: Various experts have estimated that aviation capacity expansion to Airport investments are required in both commercially viable major airports, minor airports operated as a public service and wide range of other landing facilities such as no-frills airports, helipads, and water-based ports for seaplanes  Significant investments are also required in managing air space and in digitizing air traffic management

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