India’s aviation: new leadership holds the promise of positive change, but there is much to do

A new government in New Delhi since May-2014 has brought heightened expectations of faster GDP growth, industry reforms and enhanced transparency. But with an entirely new team leading the Ministry and most of the government agencies involved in aviation, there is a lack of experience at the top. It will therefore take some time for the key decision-makers to grasp the complexity of the situation.

A clear roadmap is yet to emerge on the Indian government's proposed institutional framework, a strategy for Air India and the Airports Authority of India, and the intended policy settings on critical issues such as bilaterals, economic regulation and route dispersal guidelines. However, indications are that the government will push ahead and abolish the five year/20 aircraft threshold for international operations, airport privatisation, construction of low-cost airports and corporatisation of air navigation services.

The Aviation Minister has also been encouraging state governments to reduce the onerous sales tax on aviation turbine fuel which currently averages 24%. This would be the single greatest benefit that the government could deliver to the industry.