Centre for Aviation Studies University of Petroleum & Energy Studies
Inaugural Session The conference, Civil Aviation Industry Vision 2020 started with the Lighting of Lamp Ceremony by Honorable Minister of State for Civil Aviation, Dr. Mahesh Sharma on May 21, 2015 at Hotel Lalit, New Delhi. Minister spoke about the contemporary issues of civil aviation sector in India with reference to the 5/20 rule, route dispersal guidelines and new aviation policy and the other related topics which needed attention to develop it the issue of upgradation of India from category II to category I by FAA, USA was discussed. Minister also praised the role played by the national carrier Air India in the evacuation of Indian from Yemen and the role of Air India and other private airlines in the earthquake affected Nepal. The minister desired to know the views of the deliberation of the conference to be conveyed to him. Plenary Session 1 In the first session, four speakers Mr. Pran S. Dasan of Fly Dubai, Mr. Ambar Dubey of KPMG, Grp Capt. R.K. Bali of Business Aircraft Operation Association and Prof. Diwaaker Goel of Airports Authority of India participated and discussed the following issues: 1. The open sky policy of 1991 and its current scenario in India. The vast scope of Indian Aviation in view of the growth in Indian Economy and the world prediction of India becoming the 3rd in the world by 2020. 2. The area of cultural tourism, pilgrimage tourism and the demand of Indians in the Gulf countries will give enough boosts to the development of the civil aviation. Countries like China has 56 million tourists, Malaysia has 26 million where as India had only 6.9 million to a max of 7.4 million. 3. The cost of landing charges, ATF prices and other taxes are the impediment of the growth of the fast growth of Aviation. 4. The scope of air cargo was also discussed. 5. The development of general aviation has a vast scope but because the general aviation (GA) is treated equivalent to civil aviation, the scope is very limited. The GA should have the different rules. 6. Some thoughts were also shared on the role of Performance appraisal for the employees to give boost to the morale of the employees.
Plenary Session 2 The second session was on the Airports in India and the speakers were Mr. Sidharth Kapoor, President and CFO of GMR, Mr. Arjun Singh of Sakhti Aviation and two speakers Mr. Saurabh Kanchan and Ms. Shweta Agarwal of BMR Associates were present and the following points were discussed: 1. The opportunities in the civil aviation sector in India in the next five years are plenty but the courses of long term financing needs to be addressed. Airport operator like GMR is going to overseas to find the sources of long term funds. The issues of long term debt for the development of capital intensive infrastructure should be resolved. Because of these constraints, no foreign bidder has shown interest for the 2nd phase of privatization. 2. Since India has capable manpower availability in Aerospace, because of the FDI, this opportunity is not being exploited. If a country like Brazil can become the manufacture of the Embraer Aircraft, India can do much more. 3. The case of privatization of Metro airports and non-airports was also discussed. It was pointed out that the AAI has already done heavy investment at airports of Kolkata & Chennai. The benefits are, increase in efficiency and fast decision making but the cost to the passenger increases. 4. The Tax related issues of the FDI in the airport infrastructure, depreciation were also discussed. Plenary Session 3 The third session of the conference was on MRO in which Mr. Pulak Sen, Secretary General, MRO Association and two speakers, Mr. Saurabh Kanchan and Ms. Shweta Agarwal of BMR Associates were present and the following points were discussed. 1. There is a strong case to start engine MRO in India as India s scheduled airlines fleet currently at around 412 is expected to grow to 1,200 aircraft by 2023. Airlines will spend approximately USD$ 2+ billion every year for MRO services in the next ten years. Around 40% of MRO spend by airlines goes for engines. As more than 500 Airbus A320 Neos have been ordered by Indian operators which means more than 1,000 engines of a particular type will need to service in India. 2. Similarly MROs for landing gears, components, nacelles can be established to service Indian need, which will also create adequate employment thereby creating need for training establishments. Availability of skilled manpower is the key for the success of the MRO/Airline
industry in India. The USP for the Indian industry is found in abundance & availability of skilled English speaking manpower at a low cost, compared to other countries. For every USD$ 1 million spent on MRO services in India, it will create at least 30 to 40 new jobs in India. The two major key trends are being emerged: MROs and OEMs are taking an integrator's role to provide the after-sales services. These changes can be attributed to increase OEM involvement and changing technologies. Providing exemption from Service Tax of 14%, payment of Gross Turnover Tax (GTO) or Royalty to Airports @ 13% will encourage the MRO in India Providing infrastructure to retain MRO work within India Development of sound MRO base is also linked with developing the aeronautical manufacturing. And the industry may be provided 10 year tax holiday (covering all taxes and duties Customs, Excise, Service Tax and Corporate Tax) on aeronautical and defence manufacturing, MRO and import of aircraft. The following support will be needed for MRO business in India: Encourage states to extend the tax holiday Coordinate with Ministry of Commerce and Industry (MOCI) to modify the served from India Scheme (SFIS) such that export of MRO services are treated at par with export of Made in India products The one year exemption of import duty on aircraft parts for MRO should be extended in perpetuity Airport royalty on MRO should be totally abolished or at least reduced The customs regulation must be made straight forward and simple The Aircraft parts/consumables/expandable must be allowed to be imported without any hassle The other issue discussed in the session was the Taxation on the MRO. There is no clarity on the MRO and Ground Handling activities. There is no FDI in MRO business in India.
Plenary Session 4 The fourth and the last session was on the topic of Issues and Challenges and the participants were, Mr. Deepak Chawla from PC Solutions, Mr. Sudhir Rajshirke from AEGIS India, Mr. Vinay Garg of UAS International Trip Support and Prof. K.C. Gandhi, from Centre for Aviation Studies, University of Petroleum & Energy Studies, Dehradun. The following points were discussed. 1. India has 454 airports (strips) but only 75 are connected with schedule flights and out of these 10 are operated and owned by Armed forces. The further development depends on revitalizing the existing infrastructure/create new infrastructure where the need is required. The cost of operation is required to be reduced such as Reduction of VAT on ATF, reduction in the fare by 15-20%, self-handling of the flight by the airlines are some of the initiative required. 2. There is an acute shortage of skilled manpower in both technical and managerial activities. The existing infrastructure with the Government of India, cannot cope up with the increasing demand. Industry and academic must have synergies to meet the required skill and Government particularly Airport Authority of India should open up the ATC/CNS training to private universities/professional institutes. 3. Role of IT in the ever-changing scenarios cannot be undermined. IT has changed the scenario of civil aviation and it has helped aviation industry to improve on the efficiency of the operations thus utilizing the aircraft and more revenue.