Having undergone a turbulent period, India’s Civil Aviation Minister, Ajit Singh, was in confident and humorous mood when he addressed the media in a quickly arranged press briefing following his involvement in the official inauguration ceremony of this year’s Routes Asia network development forum in Mumbai, India. Speaking to a packed room of print journalists and local television crews, championed the change of policy last year to allow foreign investment in the country’s airline sector as the catalyst for change.
According to the minister, various policy measures initiated by the government for the civil aviation sector have begun to yield results and the airline industry in India is showing signs of a revival. He opined that the 49 per cent foreign direct investment (FDI) in aviation was "the single most important policy decision" in enhancing the troubled local industry.
“The 49 per cent FDI in aviation is the single most important policy decision, which will transform the civil aviation scenario.”
Ajit Singh
Indian Civil Aviation Minister
“The general aviation business will emerge as a key driver of regional connectivity and economic development. The 49 per cent FDI in aviation is the single most important policy decision, which will transform the civil aviation scenario,” he said, highlighting the recent announcement from AirAsia and expected Etihad Airways and Jet Airways deal as examples of growing business confidence in the Indian civil aviation sector.
Another change of policy that has given the industry an important boost was the liberalisation of the processes to grant international traffic rights to Indian carriers. "The new traffic rights have opened up several new international sectors and increased the traffic entitlements of our carriers by approximately 60 per cent," the minister explained.
The success of this process has pushed the Indian Government to seek additional access into some key markets, including the United Arab Emirates (UAE). According to the minister all flying rights to and from Abu Dhabi are now being utilised by operators from both India and the UAE and he confirmed that the government is now in the process of negotiating for more rights.
This process could play a role in the ongoing discussions between Jet Airways and Etihad Airways over the sale of an equity stake. The minister would not be drawn on the matter during the conference, but said he believed the deal “seems to be on track” given the recent slot sale between the carriers at London’s Heathrow Airport.
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