Civil Aviation Minister Jyotiraditya Scindia on Wednesday urged domestic airlines to help set up an international civil aviation hub in India and stressed the need for more wide-body aircraft for point-to-point international services for passengers. India is one of the fastest growing civil aviation markets in the world and Tata Group-owned Air India recently placed a historic order for 470 aircraft, including wide-body aircraft. As the government is working on ways to tap the country’s high growth potential in the civil aviation market, the minister said now is the time to set up a civil aviation hub in India.
“Margins are low, revenue is low but airlines are comfortable competing on the domestic side because volatility is low. The minute you move to the international side, revenue is high…but volatility is high.” Scindia said the airlines have to take the risk aversion as India’s flag has to be flown in international airspace.
Speaking at the annual session of industry body CII in the national capital, the minister stressed the need for domestic carriers to have more large aircraft in their fleet to make the country an international civil aviation hub.
“And for that, we need wide-body aircraft, we need to be able to go point-to-point as opposed to the winding route that all our passengers are made to follow… Urge to do so as there is a lot of competition at the domestic level,” he said.
Scindia was responding to some suggestions made by Bhaskar Bhat, co-chairman of the CII National Committee on Civil Aviation and chairman of Tata SIA Airlines, which operates flights under the brand name Vistara.
“As much as we are expanding our domestic footprint, it is equally important for us to expand our international footprint. It is important that the Indian flag is flown internationally through our carriers as well.”
“If we have to do that, we will have to take many more bigger size aircraft because we are talking about a flying distance of more than six to seven hours,” Scindia said. The Ministry of Civil Aviation is already working with Delhi Airport as well as Indigo and Air India to make the airport an international civil aviation hub.
Currently, most passengers from India travel to take connecting flights to various international destinations as there are not many wide-body aircraft with Indian carriers to operate direct services on long-haul routes. Speaking at the session, Vistara Chairman Bhaskar Bhat said that the annual tax collected by the government is more than the loss incurred by the airlines.
“We have a structural problem and I’m not even talking about it in this forum,” he said. While the country’s civil aviation sector is witnessing phenomenal growth, Bhat said, there are a lot of ancillary services that actually lag behind and under-serve the market.
“We are civil aviation and as a country, we know small countries that do not have a domestic market at all, have focused on tourism and hospitality as well as aviation, creating a large chunk of the economy as well as jobs. Cobbled the whole thing together as a contributor.
He said, “I am not demanding the combination of the three ministries, but thinking of it will be a great service in the long run to the customers whose aspirations are rising every day.” During his session, Scindia also said that a lot has been done with respect to MRO (maintenance, repair and overhaul) for civil aviation in the country.
“Taxation structure has been changed, incentives have been given and we are starting to see the fruits. Safran is coming with an investment of USD 150 million… I would like to ask Boeing to set up an MRO in India very quickly. It has been part of many years of waiting and many conversations. It is important to take that step forward,” he said.