ASSOCHAM proposes to create funds to perk up aviation infrastructure

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 US$ 9 billion. Private sector has had a major share in this growth with four international airport projects that got investment of over US$ 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 crore during the 12th Plan in the sector, as much as Rs 50,000 crore 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.”

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