Civil Aviation Minister Jyotiraditya Scindia on Wednesday urged domestic airlines to help set up an international civil aviation hub in India and emphasised the need for having more wide-body planes to have point-to-point international services for passengers.
India is one of the fastest-growing civil aviation markets in the world and Tata Group-owned Air India recently placed a historic order for 470 aircraft, including wide-body planes.
As the government works on ways to boost the country’s high growth potential in the civil aviation market, the minister said that now the time has come to set up a civil aviation hub in India.
“Margins are slim, revenues are slim but airlines are comfortable competing on the domestic side because volatility is low. The minute you go to the international side, the revenues are high… but the volatility is much greater.
“I plead to the airlines to take the risk, face volatility because India’s flag has to fly in the international airspace,” Mr Scindia said.
Speaking at industry body CII’s annual session in the national capital, the minister also stressed the need for having more wide-body aircraft in the fleets of domestic carriers for making an international civil aviation hub in the country.
“And for that, we need wide-body aircraft, we need to be able to go point-to-point as opposed to the circuitous route that all our passengers are made to follow… I urge his competitors to do the same because there is too much competition happening on the domestic side,” he said.
Mr Scindia was responding to certain suggestions made by Bhaskar Bhat, Co-Chairman of the CII National Committee on Civil Aviation and also the Chairman of Tata SIA Airlines, which operates flights under the brand name Vistara.
“It is important for us to expand our international footprint as much as we are expanding our domestic footprint. It is important that the Indian flag is planted internationally through our carriers as well.
“If we have to do that, then we have to get many more wide-body aircraft because we are talking about flying distances of more than six to seven hours,” Mr Scindia said.
The civil aviation ministry is already working with Delhi Airport as well as IndiGo and Air India to make the airport an international civil aviation hub.
Currently, most passengers from India travel to take connecting flights to various international destinations as there are not too many wide-body planes with Indian carriers to operate direct services on long-distance routes.
Speaking at the session, Vistara Chairman Bhaskar Bhat said the annual taxes collected by the government exceeds the losses that airlines make.
“We do have a structural problem and I am not even talking about it in this forum,” he said.
While the country’s civil aviation sector is going to see exceptional growth, Mr Bhat said, there are a lot of support services that actually lag and end up under-servicing the marketplace.
“We are civil aviation and as a country, we know smaller countries which don’t have a domestic market at all have looked at aviation along with tourism and hospitality, club the whole thing together as a huge contributor to the economy as well as jobs.
“I am not seeking a combination of three ministries but thinking about that, in the long run, would be a great service to customers whose aspirations are growing every day,” he noted.
During his session, Mr Scindia also said that a lot has been done with respect to MRO (Maintenance, Repair and Overhaul) for civil aviation in the country.
“The taxation structure has been changed, incentivisation has been done and we are starting to see the fruits. Safran is coming with a USD 150 million investment… I would urge Boeing to very quickly look at setting up an MRO in India. It has been many a year in the waiting and part of many conversations. It is important to put that step forward,” he noted.
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