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Allow 100% FDI in airlines, resolve 5/20 issue fast: Study

Press Trust of India  |  Hyderabad 

Pitching for open sky policy and 100 per cent FDI in airlines sector, an industry study today urged the government to put in place the proposed civil aviation policy at the earliest and resolve the vexed issue of international flying norms for local carriers.

The joint Ficci-KPMG report on India Aviation 2016 sought finalisation of the long-awaited National Civil Aviation Policy in the letter and spirit and also suggested going for open skies along with 100 per cent FDI in airlines and a final decision on the contentious 5/20 Rule.

"It may cause some pain initially, but will make Indian carriers more efficient, quality conscious, passenger centric and global player," the report said.

At present, government allows up to 49 per cent investment by a foreign airline in an Indian carrier. However, it has proposed to hike it to over 50 per cent in the draft policy, unveiled in October last year.

The draft National Civil Aviation Policy (NCAP), has presented many interesting proposals to promote growth in the aviation sector and its vision is to enable 300 million domestic ticketing by 2022, although ambitious, highlights the hidden potential of the Indian aviation sector, the report said.

"(The Government should) finalise the long awaited Draft National Civil Aviation Policy in letter and spirit," it said.

Observing that for super-charging growth in the aviation sector, urgent remedial measures are required, the report said India needs to be promoted as a trade and tourism hub in order to derive synergistic benefits for the aviation industry.

Leading aviation hubs like the US, EU, UAE, Singapore, China etc have a robust industrial, trading, maritime and tourism ecosystem that both supports and benefits from their aviation sector, it said adding close collaboration between the Ministry of Civil Aviation (MoCA), related ministries including finance, home, defence, commerce and industry and tourism among others, as well as regulators and the industry is the need of the hour.

The civil aviation market in India grew rapidly in the past year. During April-December, the throughput of international and domestic passengers stood at 164 million which is an increase of 17 per cent over the same period in the last financial year, it said.

The report also called for developing investor-friendly regulatory policies to encourage greater private sector investments in airports, MRO, cargo, ground handling, general aviation, helicopters and ATF infrastructure.

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First Published: Thu, March 17 2016. 12:42 IST