Even as AirAsia India prepares to apply for a No Objection Certificate to start domestic operations, Abu Dhabi-based Etihad Airways has invested $379 million in India’s Jet Airways. The outlay gives Etihad a 24-percent share in India’s second largest carrier.
India has decided to reduce the advance-application requirements for foreign-registered aircraft to enter the country from seven to three business days for landing permits, and from three days to one business day for overflights. The move is a significant breakthrough for business aircraft operators, who have long complained that Indian bureaucracy has undermined the flexibility they seek to deliver.
India’s long-awaited new civil aviation policy needs to address key issues on infrastructure and high taxation, according to Tony Tyler, director general and CEO of the International Air Transport Association (IATA). Speaking at the annual India Aviation Day in New Delhi on March 26, he urged the country’s government to produce a coordinated policy framework for aviation that all relevant departments, including the ministries for finance, economy, development, rural infrastructure and tourism, can pursue.
The Indian government’s new budget, released on February 28, brought little relief for the country’s ailing air transport sector, although the industry awaits a possible announcement of some reduction in high aviation fuel taxes. In particular, the budget documents made no mention of hoped-for fiscal support for India’s emerging regional airline industry.
The withdrawal of Kingfisher Airlines’ domestic airport slots and international flying rights by India’s Ministry of Civil Aviation on February 25 could make a phased restart of the carrier even more challenging. Meanwhile, authorities have de-registered 13 of the 37 aircraft parked in India, but airports haven’t allowed lessors to claim their assets until Kingfisher pays pending dues totaling $72 million.
“[Kingfisher has] to give some guarantee [to pay], said Airports Authority of India chairman V.P. Agrawal. “Bank checks worth $21 million…bounced. A legal issue is going on.”
India’s fastest growing and most successful airline–budget carrier IndiGo–has become the first victim of an October ruling by the country’s aircraft acquisition committee governing the number and kind of aircraft imported by airlines to encourage regional connectivity to smaller towns. In November the committee, led by civil aviation minister Ajit Singh, cleared for import only five of the 16 Airbus A320-series aircraft Indigo wanted to acquire.
India lost 9 percent of its airline seat capacity as a result of Kingfisher suspending operations since October 1, 2012, when its 66-aircraft fleet was grounded, according to Dinesh Keskar, Boeing’s senior sales vice president for Asia Pacific and India.
India’s bid to design and develop its own indigenous civil aircraft is once again under discussion. According to government sources, a new policy decision is expected on the civil aircraft program by February 12.
Business for general aviation providers in India is generally slow as the economy shows signs of slackening, yet 60-year-old Mumbai-based Air Works Engineering is looking at innovative ways to expand its business in India and abroad.
Policy-making paralysis over much-needed reforms and liquidity concerns raised by the grounding of Kingfisher Airlines has deterred investors, vendors, lessors and suppliers from doing business in India’s air transport sector, according to delegates attending last month’s Asia-Pacific Airlines Association Assembly of Presidents in Kuala Lumpur. Association calculations show that average profits among Indian airlines amount to just $1 per passenger.