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Flexible airspace use will result in more direct routing of flights, lesser travel time: CAPA

Business Finance

Press Trust of India  |  New Delhi 

There will be more direct routing of flights as well as reduced travel time, lower fuel burn and increased pilot productivity once flexible airspace use is institutionalised, according to aviation consultancy CAPA South Asia.

On Saturday, Finance Minister Nirmala Sitharaman announced various measures related to the civil aviation sector, including to ensure efficient airspace management.

Only around 60 per cent of the country's airspace is freely available and efficient airspace management for civilian flights could help in reducing flying cost to the tune of Rs 1,000 crore.

CAPA South Asia's CEO and Director Kapil Kaul told PTI on Sunday that once flexible use of airspace is institutionalised, there would be more direct routings which would result in lower fuel burn, reduction in CO2 emissions and increase in pilot productivity.

For instance, travel time on the Delhi-Mumbai sector would be reduced by 8-10 minutes, he noted.

Sitharaman also announced that efforts would be made to make India an MRO (Maintenance Repair and Overhaul) hub as well as auction of six more airports on the PPP (Public-Private Partnership) model.

According to Kaul, MROs, more PPP airports and flexible use of airspace have been on the government's agenda for some time.

Referring to the aviation industry, particularly airlines, he noted that no relief means that medium to long term downsizing of the industry is inevitable "unless promoters are able to recapitalise significantly".

The domestic airline industry is grappling with strong financial headwinds, especially in the wake of the coronavirus pandemic and subsequent lockdown. Commercial flight services remain suspended since March 25 when the nationwide lockdown was imposed.

CAPA South Asia is a consulting and research practice focussed on aviation and aerospace sector focussed consulting and research practice.

On Saturday, Airports Authority of India (AAI) Chairman Arvind Singh said efficient utilisation of airspace would reduce travel time in many sectors.

"Since travelling time will be reduced, it will become more economical and fuel cost will come down and ticket cost will go down," he had said.

Consultancy EY's Transactions Partner Kuljit Singh said one challenge for private airlines in the country is that they have nearly all borrowings in foreign exchange and have little collateral to offer for new loans.

Hence, they might have difficulty in raising unsecured debt from the Indian banking system to tide over these COVID-19 problems.

"Some of the private airlines may need to arrange for external equity capital, even at current depressed valuations, to tide over these unusual circumstances," he said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, May 17 2020. 19:23 IST