'Boost in regional air links to spur growth of sector'

HYDERABAD: With over 99 per cent of India's population yet to board an aircraft, the aviation industry feels that the next wave of growth would be driven by the setting up of regional airports connecting tier II/III cities with metros.
According to the FICCI-KPMG 'Indian Aviation 2014' report that was released on Thursday, there are around 450 used/unused/abandoned airports and airstrips spread all over the country.Although airlines such as Paramount, MDLR and Air Mantra have received no objection certificates to operate regional services, none of them have been able to take off.
"A lot needs to be done as several tier II/III cities are still unconnected or under-served. These involve relaxation of regulations, revising of security requirements, allowing domestic code sharing, providing free or discounted utilities and connecting infrastructure. The proposed essential air services fund (EASF) by the ministry of civil aviation (MoCA) needs to be set up immediately. All this will have a multiplier effect in terms of higher growth of local economic activities, tourism and employment," KPMG partner Amber Dubey said.
However, he mentioned that a 'revolution' to boost the sector has already started in the eastern part of the country, with West Bengal becoming the first large state to declare 0% sales tax on air turbine fuel (ATF) at its regional airports. Jharkhand and Madhya Pradesh have followed suit by slashing VAT on ATF.
Meanwhile, civil aviation secretary Ashok Lavasa pointed out that the government has identified 50 airports for low cost development and modernization to give a fillip to regional connectivity through the collaborative efforts of the central and state governments, and the airlines.
"What is fascinating about the Indian aviation sector in the last decade is that people have discovered value at the bottom of the pyramid and a whole range of travellers have come into the aviation fold. From an era of low cost airlines, the shift is towards creating low cost airports to take it a step further and also bring down the high operating costs in the sector," Lavasa said.