When the sky wasn't the limit

Improved accessibility, greater employment opportunities for local denizens and a better branding in the international arena "" that's what the aviation boom of 2004 ushered in for Hyderabad.

The state soared to new heights in 2004, what with the international airport finally getting the Parliament's nod and Air Sahara announcing that Hyderabad would be its aviation hub.

Air Sahara went a step ahead and also announced a whopping 400 per cent plus increase, from 28 to 140, in the number of weekly flights from February 2005.

These moves, of course, came on the back of a determined state government that had over the months announced a slew of attractive measures for airlines.

In a first ever move by any government in the entire country, which will impact the air traffic over the state's skies, the Andhra Pradesh government offered a sales tax rebate of up to 70 per cent on aviation turbine fuel (ATF) to air carriers who operate 100 and more flights a week from Hyderabad. The sales tax on ATF levied by the state is 30.55 per cent.

The sales tax rebate was part of the move by the state government to encourage all major national and international airlines to set up their hub in the state capital. The sales tax concession is in two slabs.

This ensured that airlines which operated 140 flights and above would now end up paying only 5.55 per cent as sales tax, while those who operated between 100 flights and 139 flights would end up shelling out only 15.55 per cent as sales tax.

This policy, incidentally, led to a landmark in aviation history with Air Sahara leading the way. In fact, to take advantage of the tax concession, Indian Airlines that is operating 85 flights per week now also plans to increase the number of its flights from Hyderabad to 104.

Some of the international airlines that followed suit were Qatar Airways, Lufthansa Airlines, Singapore Airlines, Saudi Arabian Airlines and Sri Lankan Airlines. Besides this, the civil aviation ministry also gave permission to British carriers and designated airlines of Australia to get access to Hyderabad, from October 2006.

Hyderabad currently has 11 airlines serving 26 destinations with the total weekly frequency for domestic flights being around 300 and for international services being around 50. The number of total weekly flights is, however, expected to be around 500 in the first quarter of 2005.

This apart, as we moved towards the end of the year, the Rs 1,418-crore international airport at Shamshabad also got Parliament approval leading to the signing of the concession agreement on December 20, 2004, between the Union government and Hyderabad International Airport Limited (Hial).

The international airport that will be able to handle five million passengers per annum is likely to get operational in 2008. This will see the closure of civil aviation operations of the existing airport, which can handle two million passengers per annum.

Although the most obvious effects of this aviation boom in 2004, will be improved connectivity and increased air traffic, its indirect benefits cannot be ignored. Air Sahara is planning to invest $20 million in the next three years in Hyderabad.

A portion of this investment will be used for setting up a call centre and an aviation academy in the near future, which will obviously offer employment opportunities to the local people. While the airline will be employing 500 people immediately, 200 more will be employed for the proposed call centre later.

For the international airport also, around 1,000 workers are expected to be employed during the construction phase with an additional 1,600 personnel for airport operations.

Besides, while the existing airport can handle 30,000 tonnes of cargo, the new airport will be able to handle one lakh tonnes of cargo. This is likely to provide local farmers and manufacturers greater access to wider markets.

This apart, the physical infrastructure in the state is also likely to improve. Hial is already working with the Indian Railways, the state government and the Infrastructure Development Finance Corporation (IDFC) for improving railway access from and to the international airport. It is also working on improving road connectivity via NH-7 and the Srisailam highway.

All in all, as the year 2004 draws to a close, Hyderabad is slated to leave an indelible imprint on the national and international aviation map.