Lok Sabha Question No. 1936 (UNSTARRED), answered on 2016-07-28
Subject: Financial and Administrative Problems in Aviation Sector
Ministry: CIVIL AVIATION
Asked by: C.S. PUTTARAJU

## GOVERNMENT OF INDIA

## MINISTRY OF CIVIL AVIATION LOK SABHA UNSTARRED QUESTION NO. : 1936 (To be answered on the 28th July 2016)

## FINANCIAL AND ADMINISTRA TIVE PROBLEMS IN AVIATION SECTOR

1936.

SHRI C.S: PUTTA RAJU

Will the Minister of CIVIL AVIATION

- () if so, the details thereof; and

be pleased to state:-

- (a) whether any study has been conducted regarding various financial and administrative problems faced by the civil aviation sector in the country in general and Air India in particuiar during the last three years;
- the measures taken/proposed to be taken by the Government to address the problems in civil aviation sector especially of Air India?

## ANSWER

Minister of State in the Ministry of CIVIL AVIATION

(Shri Jayant Sinha)

- (a) (b): Directorate General of Civil Aviation has not undertaken such study during the last three years. However, for the development of the Aviation Sector as a whole, the Government of India has recently approved the National Civil Aviation Policy (NCAP); 2016. Salient features of the NCAP are attached as Annexure.
- (c): The Government has taken several measures like persuading State Governments to reduce Value Added Tax (VAT) on Aviation Turbine Fuel (ATF); allowing direct import of ATF by Indian Carriers as actual users, permitting foreign airlines to participate upto 49 percent in the equity of scheduled air transport undertaking, allowing External Commercial Borrowings (ECB) for working requirement of airline industry for a period of one year subject to a total ceiling Of US $ 1 billion and tax concession parts of aircraft and testing equipment for third party maintenance, repair and overhau] (MRO) of civil aircraft: capital for

The Cabinet Committee 0f Economic Affairs (CCEA) in its meeting held on 12.04.2012, approved a Turnaround Plan (TAPY Financial Restructuring Plan (FRP) for operational and financial turnaround of Air India (Al) subject to achievement of certain laid down  milestones AI. As part of the costs:by

- (ii) Induction of brand new aircraft on several domestic and international routes to increase passenger appeal:
- (1) Rationalization of certain loss making routes
- (iv) Establishment of Integrated Operations Control Center (IOCC) and Hub Control Center (HCC) in Delhi:
- (vi) Operationalization of Subsidiary Companies such as Air India Air Transport Services Limited (AIATSL) and Air India Engineering Services Limited (AIESL) and transfer of manpower and equipment and treating them as Independent Profit Centers and,
- (v) Freezing of employment in non-operational areas.

(vii) induction of the B787 aircraft on the Medium Capacity Long Haul Routes.

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## Aimsand Objectives

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- Establish an integrated eco-system which will lead to significant growth of civil aviation sector; which in turn would promote tourism; increase employment and lead to a balanced regional growth:
- iii. Enhance regional connectivity through fiscal support and infrastructure development
- Ensure safety, security and sustainability of aviation sector through the use of technology and effective monitoring:
- iv. Enhance ease of business   through  deregulation,  simplified procedures and e-governance\_ doing
- V Promote the entire aviation sector chain in a harmonized manner covering cargo, MRO, general aviation, aerospace manufacturing and skill development

## Policy Areas

## NCAP-2016 covers the following policy areas:

- ii. Safety
2. Regional connectivity
- iii. Air Transport Operations
4. iv Route Dispersal Guidelines
5. V 5/20 Requirement for International Operations
6. Bilateral traffic rights
7. vii\_ Code-share agreements
- viii. Fiscal Support
9. ix\_ Airports developed by State Govt, Private sector or in PPP mode
10. X Airports Authority of India
11. Air Navigation Services
12. xii, Aviation security, Immigration and Customs
- xiii. Helicopters
14. Charters
15. XV\_ Maintenance, Repair and Overhaul
16. xvi\_ Ground handling
- xvii. Air-cargo
- xviii. Aeronautical 'Make in India'
19. xix Aviation education and skill development
20. XX\_ Sustainable aviation
- xxi. Miscellaneous
22. xxii\_ Essential Services Maintenance Act, 1968

## Salient Features:

Systems and processes which affect this sector will need to be   simplified and made more transparent with greater use of technology without compromising on safety and security. The growth in aviation will create a multiplier effect in terms of investments, tourism and employment generation, especially for unskilled and semi-skilled worker: The National Civil Aviation Policy is a in that direction. large step

Introduction of Regional connectivity in the policy will give impetus to the growth of Civil Aviation. Change in 5/20 rule for international operations is another important feature