The Confederation of Indian Industry has asked the government to encourage private participation in the civil aviation sector through joint ventures and alliances, thereby reducing the dominance of the public sector in the sector.
In a pre-budget memorandum submitted to the civil aviation ministry, CII said that as many as four international airports must be brought up to international standards through private participation. "Airport privatisation is the only way to improve standards of operations and bring in funds required to meet international standards," it said. It demanded expediting flow of foreign direct investment in the civil aviation sector while commending the government's policy to permit FDI upto 74 per cent in airports. However, it said FDI up to 49 per cent in domestic carriers should be permitted even by a foreign airline.
Tourism industry was directly linked with civil aviation and high air travel costs was a major constraint in its growth, it said and suggested review of the inland air travel tax which adds additional costs to the airfare. It pointed out that high cost of aviation turbine fuel, which accounts for 40 per cent of an airline operating cost, was a major constraint to the country's competitiveness and it made small aircraft operations unviable.
According to CII, the levy of customs duty on import of aircraft placed an additional financial burden on airlines in the country. The custom duty of 3 per cent on aircraft and helicopters should be withdrawn and benefits similar to the shipping industry should be extended to the aviation industry too, CII said.
Suggesting that all bonafide aircraft operators and manufacturers should be allowed to import aircraft related items at the same rate of customs duty as for complete aircraft, CII said genuineness of the requirement and the bonafides of the operator and manufacturer should be certified by a representative of the Director General of Civil Aviation (DGCA).
