AirAsia India CEO and MD says it was surprising to see lack of clarity and progress on 5/20 norm
New Delhi : The draft civil aviation policy received mixed response from the industry with most of the airlines describing it as “progressive” even as lack of clarity on the fate of 5/20 norm came under criticism from some quarters. Describing the revised draft policy released by the government today as “pretty progressive”, SpiceJet CMD Ajay Singh said the focus on regional connectivity is good for domestic aviation sector. “It (draft policy) has covered a lot of ground,” he told PTI, adding that an attempt is being made to reduce taxes.
Some procedural problems are also being addressed, he added.
SpiceJet would be submitting its suggestions on the draft policy and certain issues such as high tax on ATF (Air Turbine Fuel), Singh said.
IndiGo President Aditya Ghosh said the policy is broadly progressive and setting of low cost airports would help bring more cost efficiency in the aviation sector.
AirAsia India CEO and Managing Director Mittu Chandilya said it was surprising to see the lack of clarity and progress on 5/20 norm. On the draft policy, he said it was a good beginning as the suggestions made in the policy look positive for passengers and aviation sector as a whole.
“It is extremely encouraging to see the commitment and foresight in outlaying a comprehensive view on MRO, low cost carrier airports infrastructure, ground handling initiatives, tax measures, affordable tariff balancing to boost air travel and encourage sustainable growth of our industry,” he noted.
Regional connectivity, small town airports would help airlines to geographically increase the footprint, he added. Aviation think tank CAPA said the draft policy signals a positive intent to provide a direction and structural lift to the sector.
“The draft policy reflects that the government is serious about delivering genuine change and meaningful outcomes,” Centre for Asia Pacific Aviation’s India Head Kapil Kaul said, adding that the draft does not mention about the future of Air India.
“The government’s ownership of the national carrier negatively influences policy decisions and has cost the Indian tax payer billions of dollar. Clarity on what the government plans to do has a massive bearing in the industry,” he said.
According to Kaul, there should have been more emphasis on addressing the negative fiscal environment which airlines face such as sales tax on ATF, service tax on fares, airports charges and withholding tax on aircraft leases.
The Federation of India Airlines (FIA) said the policy is positive policy with mixed feeling.
Supporting the continuation of 5/20 norm, FIA said that route dispersal guidelines should not be fixed as they are based on market dynamics.
Welcoming the draft policy, industry grouping Ficci said it has laid down the long-term roadmap for developing India as the third largest aviation market.
“It is encouraging that the government is planning to coordinate with all the stakeholders to provide greater regulatory certainty under the PPP mode.
“Also commendable is the proposal for exempting MRO, cargo, ground handling players from all charges, other than a reasonable lease rental at all the future airport projects in the country. These are critical to the growth of the Indian aviation sector,” it said. Ficci noted that Regional Connectivity Scheme (RCS) would contribute to the growth of remote areas and in turn have positive implications for overall growth of the economy.
