ASSOCHAM for creating an 'Airport Infrastructure Development Fund' to perk up aviation infrastructur

ASSOCHAM has proposed creation of an Airport Infrastructure Development Fund and Essential Airlines Services Fund, infrastructure status to aviation industry, rationalization of taxes on ATF, MRO and establishment of a National Aviation University to make industry to world class.

The Chamber in a note to the government said, India is at present the 9th largest civil aviation market in the world and passenger traffic has grown from 46 million in FY02 to 162 million in FY12 and cargo from 0.92 million tons to 2.28 million tons in the same period, giving a CAGR of 13 per cent and 10 per cent respectively.

While five Indian carriers operate international flights, it has added 280 aircrafts in this period to reach 410; the aircraft fleet market size is estimated at around USD 9 billion. Private sector has had a major share in this growth with four international airport projects that got investment of over USD 6 billion.

The expectation is that in the coming five years India would need at least another 1,000 aircrafts of various types. by FY 17. 35 non-metro airports would be upgraded, 5 non-metro airports would be modernized.

Listing the "significant potential' for the country's aviation industry, the study points to the opportunities in infrastructure development for wider business, more passenger benefits and economic growth of the country through expansion of civil aviation. It underlines the fact that out of the estimated investment of Rs 67,500 crores during the 12th Plan in the sector, as much as Rs 50,000 crores would come from the private sector.

Pointing out that the market share of Low Cost Carriers (LCC) has increased from 29 per cent in FY06 to about 70 per cent the study says that this highlights the need to bring down the cost of air travel and "to make it a more affordable and visible mode of transport."

With regard to the low cost airports, the chamber says, there is need for airports which will complement the no-frills model offered by LCCs. In fact it sees great scope for a new dimension for India civil aviation in connecting to two tier and three tier cities. This should be seen in the context of the rapid urbanization of the country and the emergence of several smaller towns as industry and business centers.

The cost of setting up these airports can be covered by some measures such as doing away with baggage conveyor belts, aerobridges and buses for the passengers without compromising on the safety and security standards. Another alternative it has suggested was having a Low Cost Terminal in cities that already have an operational airport. This would offer differentiated cost to airlines and hence to the passenger.