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India needs new airline ownership rules: Kaul

(Singapore: 10 November 2006) Speaking at the Outlook 2007 session dedicated to the Indian Subcontinent, the Centre’s Kapil Kaul called for India to increase the 49% limitation on foreign ownership in local carriers to 74% and, moreover, must rewrite the rules prohibiting equity stakes being held by non-Indian airlines. “The renaissance that occurred in India’s mobile telecommunications sector would not have happened without the transfer of skills and technology that came with the participation of companies like SingTel,” he said. “The airline industry needs this kind of assistance.”

Outlook 2006

Mr Kaul, who serves as CEO of the Centre’s leading Indian Subcontinent & Middle East practice, further encouraged the government to liberalise policy on foreign investment in airline training companies. Illustrating that India’s fleet will grow from its current 271 units (up from 170 less than two years ago) to more than double that amount in the next few years, Mr Kaul explained the Centre’s belief that the country will require 2,000-3,000 incremental pilots in the next five years. “We view this as a greater obstacle to growth than the shortage of airport infrastructure,” he noted.

Also participating in the session was Executive Director of Airports Authority of India, VK Kalra, who agreed that the nation’s shortage of capacity – particularly on the airfield side – is something that requires foreign talent and private capital. Highlighting the shift in thinking that has occurred in the country, the economy of which historically has been state-dominated, he pointed to his own agency. “At the new and rehabilitated airports, air traffic management and security are the only things that remain under the AAI’s purview,” he said.

Outlook 2007 is the Centre for Asia Pacific Aviation’s annual examination of the prospects for the Asia Pacific airline industry. Convening in Singapore with the participation of 30 CEOs and 380 vital stakeholders from all components of the aviation sector, Outlook 2007 and the CAPA Aviation Awards for Excellence is the year’s premier gathering of the region’s aviation decision makers, providing a forum for dialogue between leaders from the airline, airport, supplier and regulatory communities.  

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