Key aviation reforms in two months

The central government has set itself a tight deadline of July this year for completing a series of reforms in the civil aviation sector.

The measures proposed by then include the finalisation of licensing conditions for private greenfield airports, setting up the Airport Economic Regulatory Authority and finalisation of a draft Civil Aviation Policy for Cabinet approval.

"Once these measures are implemented, nearly all major issues in the civil aviation sector will have been dealt with," an official source said.

These decisions were taken at a recent meeting of the Committee on Infrastructure, chaired by Prime Minister Manmohan Singh.

Another key measure that will be dealt with by July is the draft Model Concession Agreement for developing airports. The Planning Commission has been asked to submit the draft agreement to an inter-ministerial group by then.

The proposal to set up an Airport Economic Regulatory Authority has already been submitted for Cabinet approval. "The government is also expected to finalise the names of independent directors for the revamped Airports Authority of India shortly," the source added.

The Indian civil aviation sector is witnessing double-digit growth, with the sector growing at 25-30 per cent in 2005-06. It is expected to grow at 25 per cent annually for the next five years. Investments in the aviation sector is expected to be $30 billion by 2012 and about $50 billion by 2015.

The air traffic also doubled from 420.27 million passengers in 2002-03 to 867.59 million passengers.

The entry of low cost carriers like Air Deccan, Spicejet, GoAir, Indigo Airlines among others, have driven down fares, resulting in strong market stimulation. Looking ahead, the government also gave green signal to the merger of state-owned Indian Airlines and Air India.

Under the UPA government, key reforms undertaken were the successful handing over of the modernisation of Delhi and Mumbai airports to private developers GMR and GVK Consortium.

The two companies will undertake modernisation and expansion of capacity of the airports.