'India is likely to become third largest aviation market by 2020': Ajit Singh

New Delhi, Mar 26 (ANI): Civil Aviation Minister Ajit Singh on Tuesday said that India would be the third largest aviation market by 2020.

Singh informed that studies suggest, the countries airports would be handling 336 million domestic and 85 million international passengers with projected investment to the tune of US$ 120 billion by 2020.

"The studies suggest that by the year 2020, India is likely to become the 3rd largest aviation market handling 336 million domestic and 85 million international passengers with projected investment to the tune of US$ 120 billion. Indian Aviation Industry has been instrumental in the overall economic development of the country," said Singh, while speaking at a function in the national capital on the occasion of Aviation Day.

"I am told that Oxford Economics report commissioned by IATA indicates that Aviation accounts for 1.5 percent of India's GDP and supports 1.7 million jobs - with a further 7.1 million employed in other sectors including tourism through the catalytic effects of aviation," he added.

Singh reminded the gathering that recently he took a decision to liberalize the process for airlines to acquire aircrafts by doing away with the Aircraft Acquisition Committee.

"Recently, we have taken an important decision to liberalise the acquisition of aircraft by the scheduled, non-scheduled airlines, flying institutes and for private use. At present prior permission from the Ministry of Civil Aviation is required before the acquisition of aircraft by them through Aircraft Acquisition Committee. Henceforth, no permission for acquisition of aircraft will be required from the Ministry of Civil Aviation and they will be free to acquire aircrafts as per their business plan and requirements. I am sure, this policy decision will give impetus to the growth and expansion of airlines in India," he said.

Singh said that to give a big boost to international air travel, the government has taken substantial steps to liberalize and grant traffic rights to Indian carriers to fly to several new destinations across the globe.

"In order to ensure better advance planning on the part of airlines, the Ministry of Civil Aviation as a long term plan has already allocated the traffic rights to Indian carriers for next two years i.e. Summer-2013 and Winter-2013. The new traffic rights have opened up several new international sectors and increased the overall traffic entitlements of the airlines by approximately 60 percent over the existing traffic rights," said Singh.

"Only in Gulf and South East Asian countries, there is an enhancement of approximately 81,000 seats per week in the entitlement of Indian carriers which is about 80 percent more than their present entitlements. Now with liberalised aircraft acquisition policy, I hope our airlines will be able to utilize all these bilateral rights bringing enormous benefits to the Indian public," he added.

Singh pointed out that another area, which has given wings to the growth of Indian civil aviation is the privatization of four major airports under JV/PPP model and the policy of development of Greenfield airports which envisages synergy between the public and private sector.

"Keeping pace with the Government policy, the Airports Authority of India has also completed the expansion and upgradation of two metro airports at Kolkata and Chennai and has undertaken the development of 35 selected non-metro airports. The Government would like the AAI to run these airports including metro airports at Kolkata and Chennai by engaging professional airport operators on the management contract through a global competitive bidding process," said Singh.

"Further accelerating the modernization and development process, Indian Government envisages an investment of US$ 12.1 billion at Indian airports under the 12th Five-Year Plan, of which a contribution of about US$ 9.3 billion is expected from the private sector," he added.

The Civil Aviation Minister said the government has also unleashed the potential of development around airports by simplifying the building regulations.

"Henceforth no prior permission will be required for construction activities around airports if the builder constructs the building within the permissible height limits which will be marked by AAI on coloured maps," he added.

Singh further said despite rapid growth of civil aviation in India, the benefits of air transport have not reached the smaller cities and remote and difficult areas of the country.

"To make the growth in this sector equitable and inclusive, my top priority is to provide connectivity to these areas. Apart from the development of low-frill airports and modification of Route Dispersal Guidelines, the Government is in the process of formulation of a policy for promotion of regional and remote area connectivity in India incentivising the Indian carriers to operate on these routes including code sharing and seat credit mechanism," said Singh.

"While the aviation sector has undergone an exponential increase in traffic and aircraft movements, we have found that the safety regulatory apparatus has not kept pace with the requirements of the sector. The Directorate General of Civil Aviation (DGCA) has found itself constrained functionally and administratively to respond to the growing requirements of business," he added.

Singh said the government is in the process of introducing a bill in Parliament, which will enable replacing the existing DGCA with a more autonomous Civil Aviation Authority.

"The CAA will be a self-funding entity and shall have financial and operational autonomy," he added.

Stating that India has the potential to be an MRO hub due to the growing aircraft fleet, location advantage and availability of technical manpower, Singh said: " To facilitate the growth of MRO Business and to make it competitive, the Government of India has recently announced several concessions in budget for 2013-14 which include extension of time period allowed for utilisation of aircraft parts and equipments from three months to one year, exemption of custom duty on parts, equipments, accessories, spares required for MRO purposes to private category aircraft also and inclusion of foreign airlines for the purpose of duty-free imports of parts etc. as applicable for scheduled air transport services. I am told these concessions have been widely welcomed by the industry."

"The Government has recently cleared Flexi Use of Airspace by civil and military users. Implementation of FUA through civil and military coordination is an essential requirement to foster the air travel growth with ultimate benefit to our economy. I expect that there will be a reduction of carbon emission by about 7 million kg. per annum by direct routing between 7 major city pairs only because of FUA," he added.

Singh said that he is aware of the fact that the airline industry in India is undergoing a very challenging period because of high cost structure coupled with global economic slowdown. (ANI)