Frontier India Current Affairs

Written on June 30, 2008 – 10:31 am | by FICA |

The unprecedented increase in non-aeronautical service charges and manifold hike in ATF (Aviation Turbine Fuel) have seriously threatened the survival of the domestic civil aviation industry and, therefore, ASSOCHAM has emphasized the need for a “survival package” including setting up of an Aviation Economic Regulator”.

Interacting with the media, the ASSOCHAM Civil Aviation Committee Chairman, Mr. Jagdish Gupta along with representatives from the Industry lamented that there has been huge increase in cost particularly in hangar, checking & ticketing counters and backup office spaces. Therefore, there is an urgent need for the third regulator, the “Aviation Economic Regulator” along with the DGCA (safety) and BCAS (security) regulators.

He said, airport charges by the airport operators should be regulated by the government to prevent excessive charges on account of monopolistic nature of airport activities. There should be no User Development Fee charged by the airport operators and the cost of airport development should be recovered from the airport charges in the long term.

The government should further reduce the fuel cost of operations by way of excise duty and sales tax which are very heavy. Fuel cost accounts for nearly half of the operating cost. Low cost operations have thus now become almost unviable and common man is feeling difficulty in traveling by air. As a result, growth of air transport has come down substantially and the projected growth rate may not be achieved.

There is tremendous scope for bringing down operation cost by increasing straightening of the air routes in co-ordination with defence authorities and increasing air space capacity to reduce holding of aircraft in air and to provide optimum flight levels to aircraft. Low cost terminals should be developed urgently to encourage low cost operations.

The Chamber has suggested that the procedure for grant of operating permit to regional and small operators by DGCA should be simplified. There should be single window clearance system instead of making the applicants move from one office to other which makes the system cumbersome and prone to different interpretations by individual officers and those handling such sensitive matters should be compulsorily rotated to other positions after fixed tenures.

Mr. H.S. Khola, the Co-Chairman of the committee and ex-DGCA said, clearance of charter flights by the DGCA should be made simpler to permit operation of charter flights at short notice, after office hours or on holidays which is very difficult at present. As a result, non-scheduled operators are unable to undertake such charter flights on many occasions and lose considerable revenue. ATC should be authorized to grant clearances after office hours or on holidays and the recommendations made by Naresh Chandra Committee in this regard should be implemented.

ASSOCHAM Committee has also suggested that the benefits available to turboprop aircraft up to 80 seating capacity, in terms of landing and navigation charges, should be available to helicopter operations also to encourage connectivity to smaller town and remote and hilly areas.

Regarding the Route Dispersal Guidelines framed by DGCA for more than fourteen years back to provide air transport services in the remote areas, Mr. Gupta said they have become outdated and are causing heavy financial burden on airlines. The guidelines should be revised keeping in view the present operating environment. A joint committee of the government agencies, airlines and professional organizations should be constituted by the government to undertake the revision and suggest changes in the guidelines. ASSOCHAM offered its expertise to assist the government.

The Chamber note says, most of the regulations framed by the DGCA long time back have become out dated and need to be reviewed in the light of international and ICAO practices. With the sudden growth in air transport activities, DGCA is unable to cope with the regulatory responsibilities cast on it as per the present regulations on account of no increase in its manpower. A modern system of regulation viz, Passive Regulations, by making the operators more accountable and DGCA monitoring the systems instead of the activities, should be adopted as is being followed by the advanced countries and recommended by International Civil Aviation Organization.

Mr. Gupta further added that in the light of sudden growth in the number of aircraft in the country, government should encourage establishment of Maintenance and Repair Originations (MROs) in the country avoiding aircraft being sent abroad for major maintenance.